tv U.S. House of Representatives CSPAN January 12, 2012 1:00pm-5:00pm EST
sentenced in 2011, who committed the crime earlier in 2011 and finally had the case finalized in 2011? we will look at what you cases surfaced in -- new cases surfaced in 2011. we are going to look at a couple of cases that took place in europe which have been very interesting. then we will turn to the great spy wars going on in asia, and remarkable i have tried to be selective around the world. why listen to this lecture? espionage "trial, collecting intelligence covertly is still happening. it is a timeless reality and it has been going on and it will go
on regardless of international relations. internationally, espionage is viewed as a political crime and as a result, it is a non- extraditable no nation will extradite you back for that particular crime. partly because espionage is used by some regimes as a way to suppress people. it is not used like we do in the united states. it is often used by nations as an excuse to suppress political dissent. we see that going on right now. it has the potential for major international security implications when one of these cases services. my experience has been that often it is discounted by some, many in the media, look at it as unimportant as it relates to world events. you can take courses in international relations and world events and i look at what
is the role of intelligence and counterintelligence and espionage and often is forgotten your. have learned happy history. if you learn real history, you realize that over and over again, intelligence and loss of information or the acquisition of information has been the defining factor in world events. espionage is not an unimportant factor. it is huge. this has not been a good year for some intelligence agencies around the world. who has fallen on hard times? we must first look at libya. it did not go so well for the head of their intelligence service. after libya fell, he and the one surviving son of moammar khaddafi were captured in the southwest corner of libya. the sun was captured and he will go on trial but the chief of intelligence has fallen from
view. he was captured in november of this year and he is reported to be held in a secret location. have been no photographs of him and no reports of him since he was arrested on november 20 and there is speculation as to what has happened to him. that would be simply to watch because it may not go well for him. i don't think he was loved by the new regime ver. we look at egypt. as you may recall, the head of their intelligence service, he specialized in torture and other things listed there. i was in egypt when it fell. i arrived on the 24th and the revolution started on the 25th and i had to escape in a flight that took us out thatluxor and
into aman and then into israel. it was a story unto itself it was not a safe place when it had to get out on the 30th. what is going to happen is yet to be determined in egypt. the chief of intelligence when mubarak resigned, he took over the presidency and he announced the resignation and he fell from view. he withdrew from the political scene. he was not seen again but after he left in february until he appeared in court in september of 2011. he testified against mubarak. one thing he said is mubarak can never say he did not know what is going on.
he has not been arrested. he has not been prosecuted. what will happen to him as this unfolds in agent is yet to be seen. he has tried to maintain a low profile so he fell from power. syria, the director general is still in power. the united states has tried to make it as difficult as they can for the director of the syrian intelligence service may be because of the oppression that is been taking place there. his assets were frozen as for the assets of the syrian general intelligence service. his personal assets were frozen, the intelligence service as of four frozen and so were those of the brother of the president who was a brigadier general. that is how we responded. it appears he is still in power reported, the head of their intelligence service, and we will see what transpires in syria depending on what will happen this year.
south africa is where most people don't watch but it is an interesting turn of events. the head of their service was called the south african minister for state security and runs the three major intelligence services. he got very upset in september of 2011 and fire that had of their intelligence service because he said he did not provide protection for my wife was under investigation for drug smuggling. his wife was convicted of drugs -- drug smuggling. the results of that is that the three officials objected to providing secret service protection for his wife during her trial in may of 2011. she was convicted and he is still in power, by the way, as is the government there. it appears the real conflict and
not have been as much as it relates to the wife of ahead of their intelligence service as it was that the president wanted the intelligence services to begin on authorized operations on cabinet ministers. that means it looks like they're trying to devote their entire book is -- intelligence service for political reasons. they said they would not do that and as a result, he fired. ahead is close to the president of south never go who still holds power. if you'd better -- if you take on the king, you better win. the chief of the national intelligence agency of south africa is the domestic
intelligence and counterintelligence service and that would be like the fbi in the united states. it would be like mi5 would be like in england. c they are ci service and the first one to resign was in october. this started in september and he resigned in october of 2011. he was probably forced to resign because the guy wanted to fire him. that had of their state security agency responsible for civilian intelligence operations was forced to retire in december of this year. he was forced to resign in december and it looks like he was paid off or there was money that was exchanged for him to leave office. that took place just last month in december and ahead of their for intelligence service which is an organization of about 7000 people, the equivalent of their
cia or mi6, for the south africans -- he has resigned and resigned this year and he is being replaced by a person who is not an intelligence professional. south african intelligence services have fallen on hard times. something recently happened in russia that you may or may not have been aware of. it took place during the christmas holiday. the head of the gru who was there from 2009-2011, which is a short period of time to be the chief of the gru, he resigned on christmas eve. there is a lot of controversy as to whether he resigned because it was time for him to retire which is what you say international or he was forced to. he leaves christmas eve and he leaves the gru -- for years,
those of us heard about the co of the gru. they describe it to the senate looks like a bad man signal. makkah -- batman symbol. it is batman. they say we control the night. they talked about the new model. he left and the new chief was appointed a day after christmas and i have the brand new facility that they opened up in moscow. you are looking at two symbols of the gru. the one on the right it was there until 2009 and the other one is an exploding bomb.
reportedly, this came out of the russian media that it is the largest intelligence service. we know that they fsb svr have 4000 intelligence officers and the have half the population that had during the cold war. the population of the soviet union was 296 million people when they were collapsing. in 2011, the population has dropped about 140,000 russians which is half the population -- 140 million russians which is half the population. that is a 20% drop in the size
of the service. they talk about the fact that they gru has more people overseas doing for intelligence. it is a spy organization. it does not have a domestic mission. the russians said there was six times as many as the fsb and the svr. it was never touched by the collapse of the soviet union. it has continued on. there has been some changes in intelligence services this year. espionage, acquiring information, is a time as reality.
at the international spy museum we talk about the school for spies. i used to teach a course on the secret history of history. sliverust looking at a as we go perot this review of 2011. the development of legal tools in the united states is what we struggle with. when someone is arrested in the united states, an awful lot of ever goes into it. it is never used in a political standpoint. thereclosed society, are controls that are bigger than the crime of espionage. in the united states, we have many controls because repair a police state or
counterintelligence state. it can always tell the power of a society by looking at how they come to power. if you look at a nation state and you ask if they were granted power by the people, the government does not fear the people. our government is granted power by the people in the united states. in other societies, they fear the people because they use airpower from the people and therefore they have very, very large intelligence organizations and usually there counterintelligence service is bigger than their intelligence service. counterintelligence states are china, russia, north korea because they usurped the power from the people. there's always a balance between civil liberties and a collection strategies used to deal with that.
i like to say is all about values. i love this quote -- i take exception to his view of that. however, it is a tongue-in-cheek way -- with sometimes fierce spy catchers. we say there are no real spies but there really are and they exist. >> after six months in power, the vast party is toppled. we had sent would be coups in 10
years. >> in 1968, the party reclines power. it is the final coup. this time the role with an iron grip and no tolerance for dissent. taking command, the new president appoints his cousin as vice president, saddam hussein. >> nobody took him seriously. you are surprised to see this young civilian standing next to the general who led the coup. saddam is head of the mukhabarat, the secret police.
he stassen with loyal members of his drug and launches a systematic campaign of terror designed to limit the opposition and intimidate the population. >> he created a second layer of government. in every single ministry, there is a desk that reported directly to saddam hussein. >> [spaeking farsi] >> all the security personnel were his people. the money he gave them and the cars and prestige and power. people had never had any of that.
>> in early january of 1969, a scene starke reminiscent of nazi germany, saddam her as a public event to demonstrate the policies of the new regime. thousands court part -- thousands graduated in liberation square. >> that is the point -- condemned the spies. you want to say there is an external enemy, you said despise the the problem therefore i have to suppress and implement certain policies. you see that around the world in a variety of counter intelligence states using has been us as an excuse to suppress dissidents and establish power. some of us may not know that saddam hussein was the head of their counterintelligence effort. he was falsely accusing people
of being spies. we don't have to go very far in history to see that happening today. we look of a powder keg of american intelligence and we look at the cases that surfaced on december 15 is the young man from arizona whose family lives in michigan whose father is a college professor who was working for a company that did contract work for the u.s. marine corps, was visiting his grandmother in august-september of this year and he had dual citizenship and went back to visit his grandmother but dual citizenship is not recognized by iran. soon after arriving, within three weeks he was arrested. he fell from view in the fall and on the december 15, confesseds a individual saying he was a cia operative. that took place on december 15. you have probably been watching
this in the news. >> a man was accused of trying to infiltrate iran for the cia. the prosecutors said he entered to the department three times. but he could be punished with the death penalty on a military bases. he repeated a confession on state tv on december 80. his lawyer rejected the accusation. new dates for the next court hearing were not released. >> the story appears that he volunteered to the military
intelligence, volunteered at least three times, was arrested and they said they had observed them in afghanistan and day observed of having contact with americans which he did that because it was a contract for the military, arrested, and he confessed. to our great surprise on january 9, he was sentenced to death and had 20 days to appeal. this is ongoing today. this is a perfect sample of administration, a regime, that is using this issue to crack down on this individual. what is interesting is that he had dual citizenship and went back there and went back there at a time when iran is concerned about people coming into iran because they have had a series of assassinations like the one that took place today in iran. he walked into this situation
and now he faces the death penalty barry just after the, the white house made a statement where they said is not connect with american intelligence. and that is not always done around the world would someone who was arrested. this will be a big issue for us. there's very little i think we can do about this. watch that one very carefully. we were talking about spying but this is a terrorism case. it relates to iran and it has to do with the plot to kill the saudi arabian ambassador here in washington, d.c. using a cousin of the kudzforce.
they have huge power in iran. some people say it does not make sense we teach a 10-day course on the iranian culture and the iranian intelligence service. they are a very important national security issue. they like to use family. it makes all the sense in the world that a member of their intelligence service would reject a cousin down in texas who happens to be a car dealer and sacred to find someone in a mexican cartels to conduct an assassination in washington. if that had been successful, which they were not, because there were attached to a dea informant, if they had been successful, you can imagine what would have happened if there had
been a bombing or an assassination here in washington with the saudi ambassador. we would start an investigation and would track and back to mexico and no one would have said that the iranians did that. the iranians are very careful to protect themselves. they never claimed responsibility for kobar towers. they had been at war with this since 1979. are we going to war, from and that iranian standpoint they already are. this makes all the sense in the world and it will be interesting to watch it unfold. it is remarkable that we were surprised by it. it was very north korean-like but it is also iranian-allied. how big is the terrorism threat? students tosk my stay as county people have been arrested in the united states for terrorist-related plotzed cents 9/11 derie.
we track that every single day. we have a case page every single day when a new case breaks. we have an understanding of how big this problem is. if you were to say how many plots have been uncovered and how many people have been arrested and you ask yourself what that number is, how many would come up with the right number? the right number is at least one-third 19 people who have been charged with terrorist- related crime since 9/11 very the blue line is number of plots and the bread line is the number of individuals. about 50% of the plots are singular and the other 50 percent are multiple-people plus. the average number in a plot have been about five over the 119 + that we looked at. the average is five. or don't find large networks five -- or five networks of five
people to do it. we just had two arrests this week and terrorism. as the most recent information on how big the terrorism issue has been. when you hear that in 2011, which just found out about homegrown terrorism, but it attracted which we have been doing: a look at the numbers. we have the cases and the legal documents and everyone of these cases. we are always surprised we see some statements made about terrorism. treachery is no more rare than we thought it would be. it is not as rare as we think it is. we run a red little red schoolhouse and the training and try to track this. we had our first case 501 which is a fire-day course.
since that time, we have had 54 different courses in all sorts of different areas. we had to come up with a mechanism to make our case is relevant to we did speak with some authority on was happening. we started collecting this information. for the last 15 years. some of you may have taken our course. we can now give credit to that course. that goes back to 1995. let's talk about as big a t,he law.
people talk about as big not but they don't know what law is. that played out in june, 2010, when we have the 10 russian illegals who are arrested in the united states and all the editorial pundits to ask why they ever did not arrest these people are as big guys? the did not understand a lot less because it is. this was a great collection capability case. it was long-term operations which intelligence services run to have one man as an illegal since 1976 deployed to penetrate the united states. >> we want an attorney barry i have a right to an attorney. .
but they knew our legal system. this is annoying. this is what we found out. we're talking with emily. are you going to college? >> yes. >> what will you major in? >> i don't know. i will decide soon. i tried to avoid the question. >> young people get in trouble with law and everybody knows their rights. what does it mean to pass the bar? >> like lawyers. my brother-in-law is taking in now. > you have to pass set to go to law school. nick.ere to nui skin
what do you know about your rights? have you ever been arrested? >> for a dui. >> was perjury? >> when u.s. stewart -- you had been triggered what did you say? >> i said yes. >> how many beers to do telecopier add them up two or three. how many does really have? 12 or 30 a. what does it mean to perjure oneself? >> perjure? i don't know like for what? -- like throw up? >> i am studying business. >> what does it mean if you are
a big domestic? >> -- a bigamist. is that a wedding ring? why is it not on your finger? i'm a basketball official in cannot wear jewelry. >> what is bigamy. >> that is when you have more than one wife. >> what is the penalty? >> getting popped by the other white. >> you have to have a sense of humor about the law. what is as the knowledge? it is a very specific crime. it is always different every country. it does that have to be the same definition. we have a sense that we're talking about the traders and people acquiring information covertly that they are not supposed to have bought from a legal standpoint it is a specific thing. in the united states and other
societies, there is great expectation when an espionage case services. it is usually on the front page and what happens there is an expectation for the media that they have to show something. we used to refer to as the super bowl prosecution. we set up a program just to conduct the as denies interview because it is a crime to void ab is because there it should be no evidence that took place. you still build cases of espionage. this has been forgotten by many commentators about the russian illegals, in the united states, does it require the passage of classified information? what is the law that authorizes the united states to classified information? there is no law. a secret service
act like great britain. can you classify the information? next on your a claque -- cocktail party estimates that. authority is invested in the president of united states. in the constitution, he is the chief diplomat and chief war fighter. he conducts all foreign affairs as the commander in chief. endeavor to be the chief diplomat, the president can withhold strict information from people. when we pay taxes, we by the information supplied by the intelligence community. to protect the citizenry, they prevent us from seeing it. the president protected so that as the authority -- so that is the authority. when we say something is classified, i used to say it means no fair telling gar.
p.s. denies -- the espionage law does not speak of classified information. there are two laws, little has been nice and big and espionage. little has been lost is for people who should not receive information. the people taken into mission and retested and is prepared to pass it on. it is a lesser offense. almost everybody who has been convicted of espionage is also charged with this crime. that is little as denies. paige: espionage does unauthorized transmittal of national defense information to a foreign nation or power or political faction with intent to aid that foreign power against the united states.
to give you an example of law, law says you have to have authorized transmittal of national defense information to an individual not authorized to receive it. there's a case that took place the 1940's3 heimie had a huge impact in espionage. he was a german who had emigrated to the united states. they instructed him to go to the library in new york and obtained information on production, national defense information. he obtained technical books and rode up and passed it on. that was uncovered by the fbi. he was arrested in june, 1941 and charged with espionage. he was found guilty of espionage and foreign agents
registration act and appealed. he was passing national defense information was getting from the public library. he was determined not to be guilty of espionage because the interpretation of law that you had to have national defense information that is protected. that is the nature of the information you have to protect for espionage. big espionage, is unauthorized transmittal of national defense information that is protected. that is the legal standard to a foreign power or agent with intent to injure the united states or eight a foreign power or political faction. when i say somebody is charged with 794, you can go to jail for the rest of your life. you can be executed. lyall espionage you could get 10 years.
little as be a notch -- little espionage you can only get 10 years. people who are arrested are often charged with both. in a federal prosecution, who decides if it is protecting national defense information? that is a decision made by the jury, not the judge. most people in and give us are charged with conspiracy. conspiracy is not a crime by itself. it is conspiracy to commit espionage. when two or may people or more people decide to conduct these functions, that is conspiracy. most people are charged with espionage, conspiracy to commit espionage because the most difficult thing to prove as the transmittal of information.
in espionage statute, the unauthorized transmittal is the most of the building to peru. on whatever was charged with conspiracy. we track everyone of these cases and we put legal documents and to them. you'll find often that we use the crime a fara. it is foreign agents registration act passed in 1938. it says if you are an agent for a foreign power like a lawyer or an advertiser or do anything for a foreign power, you have to go
down to the department of justice within 10 days and register. if you don't do it, you go to jail for 10 years. most people who are spies, will not go down to the department of justice and say i have been recruited as a spy for such and such intelligence service. if i find out you are an agent of a foreign power and you have not gone to the department of justice, you'll go jail for 10 years. as a great loss. that was used for the russian illegals. there were agents of a foreign power and that is why all of pl themed 10 years. there's another great little used in the espionage world and it is called section 101. if a law enforcement officer -- you cannot lie to me. if you like to me, you go to
jail for five years for every live. if i go to in bridge to interview anybody and start the interview and lied to me, i would say stop. you just committed a felony and could go to jail for five years so let's start all over again. you don't want to lie to me. if you like to a federal officer, for every like, you get five years. in spite cases, they almost never confessed. a chart 1 in with001. it is a gridlock. -- it is a great loss. don't ever lied to a federal officer. each line is five years. let me tell aboutspyepedia. we'll update this every single day.
the man who runs this is sitting here. he does this every day. he has a staff of masters people to update this information every single day. everything i am about to tell you comes from spyapedia. 1945-2011, the past 66 years, the cases i want to show your based on foreign nationals who were arrested and espionage- related crimes. if i start looking at those questions about how damaging espionage has been and who is the most damaging spy, i like to say there are 10 people -- 20 people in my top-10 list and that is as funny as i get. to make people want to get on
the list of spies. b believeob hansen is the most damaging spy in our history. they represent different genders and ethnicities. everyone is an individual who chose to become a betrayal. the department of defense in a steady, but the list of 173. if i ask you how many people have been arrested since 1945 through today, the answer is 423 people. the average is 6.23 per year. you have to look at these cases two ways -- any case related to espionage you have to say this -- is this a be troyer case or a collector case? the russian a legal case or collectors. they did not pass information. did not have security clearance.
collectors made and communicate with agents that agents are the betrayers and agents provide the secrets and collectors receive the secret. you have to figure out what you are looking at. huckabee traders feel the secrets and pass the secrets and have no protection ve. when you look at a case, you have to say what you are looking at, a.b. troyer case or a collector case and you get different answers. 8 b troyer a b --etrayer case are a collector case. we're having a flood of as benign as cases in the united states. it is as if it is happening below are conscious level. if we look at economic espionage cases, there have been one of the 25 people at least to have been arrested for economic espionage.
the trend line is going up. we see more and more of those cases targeting the private sector. some of that this last year turned out to the investment information current there are two cases which are very interesting and new. in the last four years, 94 people have been arrested for espionage-related crimes. that means 22.2% of all the arrests in the last 66 years have taken place the last four years. we have an explosion. we see a far more aggressive chinese collection activity and we have more people working in counterintelligence that we did before.
how many countries have been involved? in 1992, the federal government counterintelligence program changed its strategy. it went from looking only at people who are enemies of america to anybody who collected against us. there are at least 31 countries who have been identified as being involved with recruiting somebody who was trying to be traded the access they had. here's what the numbers look like. the top numbers are russia and the ussr. some of those come back from the old days during the cold war. we have 341 cases of agents were
in for a foreign entity. he did the government does not identify who the collector was for a collector had not been identified by the time the person is arrested. someone might decide this by and they haven't decided to forwhom. the look of the numbers and it says it has been scattered around it is true to say that china has been coming up fast on the outside. it has been a 2001 phenomenon. the first chinese arrest was made in 1985. since then, the numbers have exploded. the vast majority of these are taking place in the private sector. if you look at every single one of the cases in the last five years, every single one of these
cases have been digital theft. even though we live in a digital age, espionage continues as it did before. in the past, someone may have taken a document and copied it. today, they visually get the document. in every case, the insider -- if you look at the problem of collection against this, you have to look like a fourth. fort. and they tried to get inside your system. if you set up a good security system, you can deal with that kind of the external attack against you. we tracked the in thespyapedia. we track the cyber attacks. we keep a good track of those cases. that is half the problem. a lot of that is going on.
then you have the other problem and that is the spy on the inside. they don't have to get through the firewall. those individuals to acquire the information get it out either em byail or the have and an external hard drive and copy it. it is simple if you have the right system to detect those two things. some organizations are doing a great job in their commitment to understand the insider threat a lot of discussion today is about the insider threat. there is nothing new about that. it is just using a different media. these are looking a chinese cases, there have been 67 age p of therc arrested -- there of about 67 of the prc arrested since 1985.
russia is in red and the cases are in blue and the prc is in green. if we say what is the employment status of the individuals who were arrested, you can see they're coming out of the private sector because of economic cases and foreign nationals and then we start going down to navy, army, contractors. the navy has an aggressive counterespionage programs, one of the best ones and the government. they have a serious commitment to catching spies. they have more than any other government agency. where the spies are coming from. the level of astronauts sometimes take our breath away. -- the level of espionage
sometimes takes our breath away. there were 541 spies in this time from inside the u.s. government or private sector during world war two. that includes literally every u.s. government agency was penetrated during that timeframe by our allies. we know this through thewinona decrypts and his wonderful book by highly recommend a ",speies: the rise and fall of the kgb." we listed the spy wi is andnona which was the description program have put that together and what you find is where these people were. 541 by name and organization.
every place in the united states was penetrated. that tells you that you do not invest in this and take it serious, it is like getting cancer. it will spread like a virus. when i show you the numbers today, we still have less numbers but it still goes on. even 38 spies inside the media were also agents in this timeframe. we have many of their names. you will not find that list anywhere else. let's turn to 2011 in the united states. these other cases that were sentenced. wrote one of them was interesting which was and rarely -- a st israeliing case. it has to do with this guy. he was a massachusetts and very unhappy with his wife and worked on an internet delivery service and decided to send an e-mail to
the israelis, to the consulate in israel. -- in new england, i'm sorry. he volunteered by e-mail. the israelis passed it all along to the fbi. they looked at this guy and this is what he writes -- he goes on volunteering that he wants to spy for israel because he is jewish. a year later, the fbi response to him and they begin to correspond. during that time, he says i want to help our home land and our war against our enemies. not a bad things can happen to her, he talks about his ex-wife. the it was not real at the mi the formerssus and they asked for a little bit of money.
there is a silly -- a series of dead drops between the fbi anddoxer and he thinks this is the israeli government and they do this 62 times. this relates to computer systems. he is arrested and in august of this year, he pled guilty to one count of economic espionage. charges were dismissed any faced 15 years in august of this year. he got six months in prison and six months in home confinement and find $230,000. that was finalized today. this was another case that took place involving the prc. it is a new trend we have never seen. glen duffy shriver. >> a man sat buildup in
international in trading in houston taking tens of thousands of dollars from chinese intelligence and is now charged with lying to the cia. >> neighbors said they had not seen him in several years. >> i saw him occasionally getting in his car. >> the 28-year-old lived with his mother in this quiet neighborhood. the last was heard, he was living in california trying to get a job and law enforcement. >> it's scary. >> the interview of the neighbors are always interesting. they're always not sure and i never thought he was a spy. this case was interesting
because here is going to grand valley state cards and have a big international program and he goes to china and they have 24,000 students there any studies abroad in shanghai and lights china. they put 4000 students overseas. the light china. -- keylay to china. anything he said in a tunnel was very pro-peeress the entire one. he studied his junior and came back here in 2004 and studied mandarin and looked to work. he did some advertising. he did an advertisement in english for someone to write a political paper. the woman who responded to this was a man there who hired him. she paid in $200 and recruited relations between china and taiwan.
that is the key issue between china and the prc. he then --amanda sets up a meeting with the chinese intelligence service. they suggested he might be interested to go to work for the state department or the cia. he says he would be interested. they arrested the do that and get some secret documents. he said that sounds like a good plan. he said he was willing to do that. he applied to the state department and got on the internet and took the service test in shanghai. it is very difficult to pass and he failed. they gave him $10,000 for trying, for his friendship, we have never seen that before. what happens next? one year later, he takes the test again and he fails again.
they pay and $20,000 for taking it a second time. he's got $30,000 for failing to serve -- the foreign service test. after that, he submits an online application to the national clandestine service of the cia. he does that in 2007 and he then flies to shanghai and meets with the prc officers during that time. they paid and $40,000 for having made the application. he now has $70,000 in his pocket and he has not been hired by anybody yet. it is rare in the spy business for anyone to be paid for future. it is almost always after the fact and we have never seen this from china before. in december, he is advised to report to the cia in washington for his final employment processing.
that means taking a polygraph. in february, he felt as al statesf-86. when it fills out the form, as he committed a crime? the cry ms.10021, he is lying on an official document. he takes a polygraph and he admits to everything. he could of said the sun is did this to him but he continued and tried to do with a dead end in june, he had a criminal indictment. he is indicted for 1001 which is lying five times. he is facing 25 years.
now they sit down and have a conversation with them. he chooses to corporate and pleads guilty to 793 which is prepared to react which is little as benign as which is 10 years. he pleads guilty to that end at the end of last year, beginning of this year, he is sentenced to 48 months and now is a convicted felon. it is a remarkable case. there is another big prc staying case at the end of 2010 that led to a conviction this year that had to do with brian martin. he is a navy reversed -- reservist at fort bragg. he is a defense dia agent -- >> this happened at three different hotels.
>> this is difficult for our country. >> that is the reaction we got for a lot of folks around here for espionage is unthinkable around here. >> it breaks my heart. >> brian martin delivered military files to undercover agents several times. he thought he was beating an intelligence officer from a foreign -- meeting and intelligence officer from a foreign country. the documents say it he was seeking "long-term financial reimbursement." he was given at $1,500 in cash. later, on november 19, march and met the undercover agent again, this time at this holiday inn
express. 51 pages of documents, marked secret or top secret, and again paid another $1,500. like a lot of other americans, in and out of uniform tonight -- >> we were interviewed at a bar turned out to be a spy, right? he was arrested in a sting operation by ncis and fbi. none of these were passed for foreign nationals but he was charged with 794, big espionage ghe did it in a court martial setting, and long-term financial reimbursements was what he said -- this man comes from mexico. -- mexico, new york. this year he pleaded guilty to
11 counts of attempted espionage for trying to sell classified material. he is sentenced to 48 years due to pretrial agreement. he is facing the 34 years of the federal charge in fort leavenworth. he says, "meizell was blinded by greed." -- my soul was blinded by greed." he is facing 34 years of federal time. there is no parole for federal time did 34 years is 34 years. you never want to get charged federally. 10 is 10. yesterday, a young man here got convicted by the fed and got 100 years for multiple rapes, plus 27 years. 100 years federal time but that is 100 years federal time. this guy got 34 years that a time for doing that.
another one, another man who was trying to volunteer to the israelis -- he did this in 2009. this year he pled guilty to 794, big espionage. 13 years for trying to do that. the case broke in 2009. new case of 2011. this was a very interesting case, remarkable that it went to trial. this went on for an activity that went on from 1990 to 2001. it broke in july of this year in washington, d.c. kashmiri american council, located in washington, d.c. just down from where we are. he had over 5000 meetings with
them. he was funneling money from the pakistanis to this organization. more than 4000 times with isi intelligence officers in washington, d.c. at the result was this. >> the isi agent has pleaded guilty to charges of spying for the pakistani intelligence agency, isi. he has pleaded guilty to receiving millions of dollars from the isi for 1990 to 2001. he is charged with illegally lobbying and pakistan to influence u.s. policy in kashmir. >> it is an interesting one. he whawill probably get 10 years.
another one broker in the fall of this year. brian underwood was a consulate guard in china. he tried to spy -- he sent letters to the prc with information on the new consulate being build and the photographs he took inside the consulate. he gets arrested twice in september, because the first arrest, he is questioned by the fbi concerning the contents of the letter and the photographs. what did he do? he lied about it. he committed 1001. arrested on two counts of making a false statement. that was in september 1st. he is supposed to appear in court, same month in december, and he flees. they arrest him in l.a., and
look what the charge is. they charged him with the 794, big espionage. he is facing life imprisonment for espionage if convicted of that, or he pleads guilty of that. that took place in september here in washington, d.c. this is a remarkable case. he is arrested in october 11, 2011, as an agent of the syrian intelligence service. >> quiet role street in leesburg, virginia, residents watched as federal agents raided his home yesterday. according to neighbors, he, his wife, and children rented a house for two years. no one knew them very well. >> there were a lot of the vehicles up and down the road. obviously, threatening
materials, kinds of things. >> he told a federal judge in his first court appearance that he wanted to hire his own attorney. for now, he will remain in federal custody. in a 15-page indictment, soueid had a video and audio of people protesting the syrian government. the indictment describes a recent trip to syria, a meeting between soueid and president bashar al-assad, and a meeting at the syrian embassy in washington, d.c. this is a photograph taken from his twitter page print there are only five tweets, all from last january. he worked at a friday of car dealerships across northern virginia -- a variety of car
dealerships across northern virginia. >> he is going out to demonstrations that have taken place since the crackdowns began in syria. his videotaping them, audio taping them. anti-syrian protesters in the u.s., and eventually syria. he provided to the intelligence service, and that is used to intimidate families in syria. he recruits a network of individuals to help him in the united states to collect information on demonstrators in the united states, the protesters. and then he conspires to provide this information to the syrian intelligence service. these are targets of his demonstrations. these demonstrations have been going on. maybe you missed them, i'm not
sure. the information is sent to an unidentified co-conspirator, and he is providing the reports by e-mail andin -- emailing them to the syrian embassy in washington, d.c. audio recordings, links to web pages for protesters in the united states. a list of who is missing and dead date demonstrations that he is collected. a collection of telephone numbers, email of the protesters in the united states, the kind of information that would be of great value for the syrians to crack down, which they did. a good example of the things -- the cause and effect -- syrian composer and pianist in washington, demonstrating for protesters in july.
and they went into his house, and this is what they did to his mother and father. [captioning performed by national captioning institute] they have actually come to the united states, the mother and father. they are still alive. the violations against protesters, he said, was justified. any methods used against protesters -- these are his words justifying what he is doing. he is acting as an agent of the syrian intelligence service, and when the fbi goes to talk to him, he lives. he is facing -- he lies. he is facing 40 years.
15 years for arms purchases, which he also made by falsifying his records -- called "piling on." he is facing 40 years for what he was doing in 2011. he must be held until trial. in its first trial, the judge did not to stand -- they let him out on bond, the next judge said no, you cannot be doing that. he is scheduled to go on trial in may 2012. here is another case that broke in october of this year. >> the fbi says a young american soldiers stationed in alaska has been charged with espionage. the 22-year-old is a military policeman from kentucky. he is stationed at a joint army air force base in anchorage. >> this broke in anchorage. it was real quiet when it started.
he is a military police officer, at an air force-army base in alaska, and he volunteers to an unidentified country. his group is called the arctic gladiators. it appears that he may have done this because his unit was deployed in he was left behind. unclear but not much has come out about this particular case, other than that he is under arrest. he tried to translate -- transmit unclassified information to a person he thought was a foreign agent. every so often you see this service, or someone tries to get a sub-agent. this was his home in kentucky. he had been in iraq previously,
and that he was assigned in alaska in of this year, and then arrested in fall of this year. attempted espionage, failure to obey general orders, contact with a foreign official, soliciting statements and communicating defense information. he will be court-martialed, because he is in uniform. interesting to watch how this case unfolds. being investigated -- the three of them are working this case. that is what we have had in national security cases 2011. nine people involved in the united states in economic espionage cases. a couple of them are particularly interesting to highlight. chinese prc nationals who did
not have diplomatic immunity, toward trying -- who were trying to violate the arms control act for munitions list items designed for satellite use. they represented a company in the united states. they were eventually arrested in hungary, but it was an export case. it was extraditable. arrested in september 2010, but returned to the united states in april 2011. chinese nationals arrested here. in june, they pled guilty to smuggling microchips to companies controlled by beijing. that is what they got them on the crimes forbid they pled guilty, and have yet to be sentenced -- that is what they got them on the crimes for. they pled guilty, and have yet to be sentenced. these were giving information to
iran, transportation technology information. they were doing shipping for information they could not send it to iran, but they were sending it to dubai for final delivery to iran. the affidavit said they were using this to purchase millions of dollars worth of laptop computers, going ot dubai and then being diverted. the agent in dubai was arrested himself and sort of gave them up. this is pending trial in the united states. a non-criminal case, but economic case, a man and his father or conspiring with at packing company against amor
packing, using a marketing data to compete against them. that was made of this year. this is interesting because of what he had access to. ethnic chinese in the united states, a senior software engineer, 49 years old, a national. it is not clear to me with the key is a nationalized american --whether he is a natio nalized american or born american, ph.d., worked in commodities trading pit they wanted to set up another company to do commodity trading in china. he was getting the methodology used by his company to take after the company they were setting up in china. what did he do? he got the information, he downloaded as thousands of files
on his thumb drive, transferred these stolen documents to his personal computer. he goes on, puts them on his email, sends them to china as attachments. source codes, proprietary information. he was going to go to china in july. arrested on the first of july. he faces 20 years for doing -- for this economic espionage case. here is another case, with this man from colombia, very polite, involved with citadel investment. he is criminally charged and federally charged. >> a case that sounds like a spy novel. along with charges of corporate
espionage, there are secret informants and scuba divers in canals. how it evolves around and i believe the financial whiz -- around an ivy league financial whiz. >> it is a caper that would rival anything you see in "mission: impossible." 24, a couple of years out of cornell. with billions in assets, citadel is one of the world's biggest hedge fund managers. the firm goes to great lengths to secure its employees and the computer network they use. the secret trading coats are known as alphas. this employee went out to steal those valuable goods by
bypassing the company's intricate security protocols, then transferring the files to external devices. and questioned by his superiors, claiming he was merely downloading academic papers and music files. officials did not buy it, saying that pu was stealing trade secrets. after he was caught, federal agents were told that the 24- year-old computer whiz had come to some of the evidence into a sanitary pan out near the harbor. divers discovered computer equipment in the water here that contained the alphas, the building blocks of the firm's success. >> i want to move to overseas. if i might, let me go overseas and to show examples of things that are taking place there. first of all, if we look at what happened there, two european cases that are really
interesting. one was in the netherlands, and it broke in march of this last year, where a 37-year-old pilot, a jet pilot, he was charged with spying for belarus, the belarus kgb. it was made public in april 2008. our originally, this captain was arrested by the secret service as he was trying to pass state secrets to the belarus kgb. as the case began to unfold, we realized he had been working royal naval air force, no longer working for the service. this is a man who acknowledge that he had financial problems, that he had worked for defense for 13 years, and he had been on bombing raids in afghanistan. in a war fighter for them. -- he had been a war fighter for
them to he wanted to do business with a resident of belarus. by the way, they still call that the kgb. there is a close relationship between belarus and today's russia sbrfsb. it turns out it was a gru case. he was arrested at a meeting with the defense attache for the military. it seems that in august, its services that he had even more circuits -- it surfaces that he had even more secrets that they thought. when he was originally arrested, they did not say he had this much. he had in this and a container that was being shipped to the united arab emirates. that is where his material was, which was included in files and cd-roms.
he attempted to pass the information, $500,000 of euros, and he was convicted in december. he would have given up five more years. i have talked to europeans -- colonials a sensitive test and i should have had great debates about that. -- colonials are sensitive to espionage. i have had great debates about that. spy scandals -- great britain had won this year. the thought that after the and enchantment case, -- the anna
chapman case, they had to have a big one. katia was working for a man in the parliament. it was a big issue in england. >> officials in london have been allowed to contact a young russian woman and arrested almost a week ago on suspicion of spying. she now faces deportation. she was an assistant to a british mp. the uk says she was gathering information on nuclear facilities. providead refuwssed to information about the rest, and had initially blocked access to the woman. >> she had been called a honey trap, a blond bombshell, and a
russian spy working at the heart of british government. who is katia? her family moved to another part of southern russia to escape conflict. she attended this specialist language school, and like many good students, kept in touch with their teacher, said in photographs from our trips and other mementos. >> she was a very hard-working student. i cannot believe it was all about katia until i saw her photo. >> unfortunately for katia, this is the type of story that the british press loves. they dug up every titillating detail about a woman who loved short skirts and high heels. france report and other side -- friends report another side to
katia. >> part of the program was to test the international experts. a bright young woman who has the education, knowledge, loves our country, but is willing and ready to go abroad and share that experience but also gain more experience. >> she had limited access to email in the detention facility where she is being held. she is appealing against the deportation order. >> she was held, there were going to deport her, it was news all this year. december of this year, they added a deportation hearing. >> very happy, thank you. >> katia has always protested her innocence, and she remains in the u.k. for this appeal. the immigration appeals commission has exonerated katia
and overturned the deportation order. the panel found that katia is not, in the woods, a russian spy. -- in other words, a russioan spy. the case was said to be wanting at every stage. >> it must have been very disappointing, with the great anticipation in this case, that it turns out to become according to this hearing, nothing. that is not true with the other one i am going to talk about it there is an ongoing spy war going on in asia. thailand, cambodia, korean spy wars. if you get involved in working the china issue and you have anything to do with taiwan, you will certainly know the
intelligence service. we are still engaged in "a war without gunfire." if you look at what is going on, he is absolutely right. the national security branch, which is like the foreign intelligence service, the military intelligence bureau, and the minister of justice investigation bureau, there counter intelligence bureaus similar to the fbi. that is what constitutes the time and his intelligence service. -- taiwanese intelligence service. they are aggressive, they use official cover, and they aggressively target prc students in the united states and around the world. the minister of justice investigation bureau is the one
countering internal disorder. it does counterintelligence with in time what -- within taiwan. the military intelligence collects military intelligence information -- once again, big deal in china. what you find when you study this by business, cases do not stand alone. each case it gets another case. that is what we see happening here. prc court-martial executed two of its own officers. these were a success with it taiwan intelligence service. spying for taiwan. that is 1999. they had been providing information on missiles. they were talking about the capability, and information, did not carry warheads at some times.
missiles over taiwan has caused a lot of concern for taiwan. a good book to read on this is "assessing the threat." it is out a lot more detail than i have time to talk to about. there have been 14 a very high- profile spies for the prc. look at these individuals, look at their rank, that it would they work. a retired colonel, petty officer, retired colonel from the military intelligence branch, civilian high-tech organization, mib, in essence of the organization of their intelligence services penetrated, leading up to a case this year. it was almost like a crescendo. in september, a captain and his
wife for capturing intelligence for the prc. he is arrested in 2002. they had recorded their son as a decoder for the navy and used them also. this is a family affair, if you would. they used their information to email. son would pass to dad, passes it to prc. the petty officer, when he was arrested for espionage, he got a life sentence. father was arrested on smuggling, released after allegedly agreeing to spy for china. that is how he became a prc spy. now he is working back against them. he took over $10,000 hong kong,
a month. you don't find a lot of money exchanges in prc cases in the united states. you see economic cases i talked about, but you don't see the kinds of high-cost things. but you do in this spy war that's going on. military bank officers were arrested. one was a colonel passing information, the other was a lieutenant colonel passing information. these were the men were compromised the officers that i told you were executed in 1999. these were the sources. it led to these two officers being killed. this is a high-tech spy case. 2003. espionage scandals -- one of
the biggest espionage of scandals ever in the island. he was released, and he never went to trial for smuggling for the prc. he got away with it. primary research and development institute for the defense and armament range. -- branch. announced that it came to 24 taiwanese -- it had detained 24 taiwanese, and they at all confessed during the same time, high-profile individuals or arrested. this particular one was arrested in 2005, went to trial in 2007, sentenced to death. he, along with his co- conspirator, who was in china, prc national, who wo had recruited to work for them, they were both executed in 2008.
he had graduated from medical school in 1981, said on a scholarship to germany, and he was living in germany, he got his medical degree, retained austrian citizenship, and began to visit the prc on a regular basis. in 1989, he was recruited by the military intelligence branch, soviet natural access to -- so he had natural access to the prc. this was as early as 1989. he developed a network of the main man, spent about $300,000 with his wife setting up a restaurant. it was an important source for taiwan military intelligence penetrating the prc. he finds the man he knew was a relative of his, and he recruited him. a missile technology expert,
and he provided information on strategic missiles. the question became how did they get a compromise. one member of the service made this comment, which i don't necessarily buy into, but he said that the sars outbreak of 2002 was a biological warfare for lemula by the prc. i don't buy that at all, but it is the kind of comment going on between them. who compromised these individuals? this colonel -- he passed the information, and another lieutenant colonel. but military intelligence. they were the sources of these two men who were executed then you have the counterintelligence service. he retired in 1997, and then recruited a friend of his who was still in the service. not un, and in these chinese
cases. the -- were arrested in -- not uncommon in these tiny spaces. they were arrested in 2007. he became a businessman in china. there he was recruited by the prc, went back and recruited one of his friends. this goes on over and over again, people who go back and forth between the prc and china. this one was a section chief of the military intelligence bridge. he went back to china to do business, record once again. we are seeing it over and over again. is his motivation. china recruited him, saying who do you know in the organization.
high level penetration. here is one who worked for the legislative arm, and the one that i find interesting, the adviser, the office of the president was recruited as a source, a former senior adviser to the office of the president. you can imagine what would happen if that was in the united states. the prc has been very successful in penetrating taiwan in this spy war going on, and they had this high level access. >> a high-ranking military official arrested on monday for supplying intelligence to the chinese regime. prosecutors believe this began in 2007. it is the highest case of espionage in taiwan in 20 years. arrested on charges of supplying intelligence to the chinese regime. the colonel is in charge of
building taiwan's spy network in china and the intelligence bureau. he was recruited in 2004 to serve as a source in china. he told prosecutors -- [unintelligible] he returned to taiwan to get information from the colonel. they say trachinese intelligence paid as much as one order thousand u.s. dollars. -- 100,000 u.s. dollars. >> the minister of national defence and covered it. this has been handed it to prosecutors. mib is doing damage control based on the situation.
>> despite the major-general's reassurance, some consider these spies a serious danger. >> that was in the beginning -- end of 2010. the colonel was recruited by his agent. he had been one of his agents. he was part of a network. he had worked for the colonel in 2003, 2005. eventually, the taiwanese thought he might be controlled. paid him off $50,000 for doing it they dropped him as a spy. in july 2006, they went back and recruited him and asked him to redeem himself, because he is living in china, contact his handler who was in taiwan, which he did.
they say they were using the reception operation also. interestingly, because he was paid $46,000 by the prc, what was the end result? the couple posted classified information 12 times, paid $100,000 for his action. he used the information to get himself promoted in his own organization. he ended up getting sentenced to life plus 21 years. it led them to the big one, and this is the big one that took place this year. >> taiwan detained a major general for allegedly spying for china. officials say he was promoted to general in 2008 but was recruited by china in 2004. >> i taiwanese major general has
been detained for handing over military information to china. officials's military confirmed this on a wednesday. he spied for china for at least six years. >> the general was posted overseas from 2000 to-- from 2002 to 2005. he was recruited by china in 2004. >> he says the military court searched his residence last month and detained a major general to provide the risk of him escaping, destroying evidence, or threatening military security. >> at that end of october last year, 2010, the defense ministry and national security department cooperated to obtain leads in the investigations. >> the defense ministry says that all should be cautious of
china's intentions, even with the apparent warming of cross straight ties. taiwan officials say beijing has about 1900 missiles aimed at the island, just 100 miles away. the major-general is the highest-ranking military official to be charged with espionage activities. >> this has been quite a remarkable case, because he had been providing information in 2004, he was a major general since 2008 . hhe turned on information on apache sales made by boeing, and the optical cable network, which we built for them, was compromised by him.
it was in bangkok that he gets recorded by t -- recruited by the prc. in what appears to be a love relationship, he recruits this woman, and his last job, as you can see, is military, electronic, and information department. he had intimate knowledge and privileged access to management systems, electronic codes, crucial military secrets. very significant for the defense of that area. he also had access to joint electronic warfare communications, as well as a special project on technology for encrypting communications with the island. part of the system was built by lockheed martin. all this information he could compromise. he was recruit -- he recruited a woman, initially pretended to
be working in import-export trade, he met her and was recruited as a prc agenet. -- agent. paid as much as a million dollars. china does not pay that kind of money except as it relates to china. he maintained contact with this woman even after he left taiwan, and there was some reporting that she had come to the united states to meet him when he was here. he was not assigned here, but the woman was a high-ranking chinese aged to was station and had contact with him. that is un and aerospace confirmed. in april of this year, -- he got u -- that is unconfirmed. in april of this year, he got life in prison. in june, another high-tech case -- prc tasking him for
information related to military secrets also. >> i taiwanese software engineer has been sentenced to jail for a year-and-a-half after he was caught spying for the chinese regime. we spoke to one at a time when he's lawmaker who said that the prison sentence is too light -- one taiwanese lawmaker who said that the prison sentence is too light. >> the taiwan-cambodia border war -- you may not be aware that this is going on. there is a contentious border that exists between them. in february, a high-profile activist in taiwan's network, and his secretary, entered into cambodia from thailand, arrested,, unlawful entry, going to a military base, and espionage. he got eight years, she got six
months. another one was right on the border, where these three nationals -- thai, cambodia, vietnamese -- got caught spying on the border. there handler, a colonel, apparently was not arrested. the three got two years in jail in september of this year ganother spy war going on. they were providing information that they saw. just military operation. it culminated this year. i want to talk about the spy wars up north and south korea. nobody espies and does things like the north koreans. two in july, 2010 -- two north koreans who had come into the south were sentenced by the
court to 10 years for attempting to assassinate the former secretary of the north korean ruling communist party. this is a man in charge of their communist organization. he himself had defected to the south in 1997. this has been a real problem for north korea. and they said an assassination team to track him down and to kill him. two of them were arrested in july 2010. this particular colonel, a career reconnaissance bureau, was in charge of the assassination operation, and they cut his head off. they are not pleased with him. a third career and was jailed and given 10 years for plotting to assassinate -- third korean was jailed and given 10 years
for plotting to assassinate hthe same man. multiple accounts to track down the head of the communist party and assassinate him. another one took place in september of this year. with the arab spring in bloom, south koreans said that this is something that the north korean- controlled society should know about. the south korean national intelligence service up tdetaind a man on a platform. ark, the main in the photograph, was himself in north korean defector, he defected in 2000. he is a member of an organization called fighters for a free north korea. there were some 20 members who
were sending him helium baloons into the north with propaganda leaflets concerning the arab spring, along with dollar bills and radios. they wanted the north to know what was going on in the world, because the north is so isolated. obviously, the north is getting these plans, and this man was -- getting these baloons, and this man was a defector, so what do they do? they sent an assassination team. he was supposed to meet him at a transition, subway platform, and he was interdicted and arrested. when they arrested him, he was where didoison t, and the assassin come from? the assassin is also a defector. he had also defected to the
south. the north contacted him and said that if you don't carry out this assassination attempt, we are going to kill your family. what am i supposed to do? they are going to kill my family. he was arrested trying to commit this assassination. only in korea would use these kinds of things unfolding. he was trying to carry this out before he was arrested. there was another defector, head of a christian group, they were trying to assassinate. another man with free north korean radio they were trying to assassinate. another man was part of the education center for unification that they were trying to assassinate. assassination is alive and well. north. defections have been an issue for some time. 22,000 north koreans have been
at defected, 200 have been returned. you normally don't see that and other parts of the world, but you do see that there. one last black male case of this year that i want to tell you a -- about. -- one last blackmail case of this year i want to tell you about. he was in bangladesh for a conference in october. he got involved with a woman. they approached him to recruit him. all indications are that he did not work with the pakistanis, but he turned himself in. he went back to india, and they are deciding whether to prosecute him or not. it became public just before christmas, and it is being done by the best whitby road -- is being done by the investigative
bureau for in the ipad espionage is alive and well -- the investigative bureau for india. espionage is alive and well. there is two hours of the beginning of espionage for 2011. i am open to any questions you have in the time have. yes, please. >> who do you think is killing the iranian scientists? >> ok, i have no inside knowledge on that whatsoever. but who has the capability and motivation for doing that? only one organization i think that would have the capability of doing that, the israeli intelligence service. i do not believe that there would be any americans involved, contrary to what the iranians are saying. it could be iranian dissident
organizations who are also upset. they may have been agents acting on their own, or with the support of israelis. i have not seen any evidence to pinpoint a particular country. that would be my educated guess at this point. i retain the opportunity to change my mind. but no one else has the capability or the willingness to do that. when they get you may find interesting -- last year there was an assassination that took place in dubai, and it had all the earmarks of how israel operates. they did the assassinations, and two of them, when they flew out of dubai, flew to iran. that is like say i can come into your country, leaving our country, and you don't even know. i am. -- and you don't even know i'm
doing it. that is my educated guess at this time, with no inside knowledge whatsoever. any other questions you have? >> going back to your definition of espionage, little espionage, big espionage, is a man from what we think we know in the public domain -- assuming what we know in the public domain is true about julian assange and wikileaks, could a case be made against him for espionage? he is not an american, did not commit these acts in the u.s. on the other hand, he released this protected information to foreign powers. looking from espionage one of you, julian assange, want to sort of riff on that. >> assange and manning --
bradley is going to be charged in a court martial. they just at hearings on that -- article 34 review of the case. i think is going to go to trial. assange is another problem, because even if you wanted to charge him, how would you get him here? theft of government property? he did not steal it, he received it. it also has a huge political dimension to it. that is always a consideration in these cases. tactically, technically, if he was in the united states and he received that information, he could and charged with 793, retention of information. you have the legal arguments, and if you follow closely, which i am sure you have, the documents that were made in the preliminary hearings, is the case or the following closely in the united states.
in practical terms, i do not see him being charged in the united states, because i don't see any way you could practically do anything with the case because it is not in the united states. you have to talk to the department of justice about whether they want to take that case, anyway, because of all the political dimensions. yes, please. >[unintelligible] >> to i think what? do i believe state-owned companies -- >> is there potential there? a potential for state-owned companies, say they hire a lawyer -- >> oh, those people to register. those people acting for the government -- you have to
register. a french company and not related to the government, they do not have to register. there is many people who come to the department of justice and minister. -- and register. lawyers and businessmen of all types and to register. within 10 days you go out and register as an agent of a foreign power. remember jimmy carter's brother billy acting for the he did not go and register when he was working with the libyans. it was a bit of a snafu. if it is a state-owned company,
you are acting for the state and you have to register. naturally, i would go to my attorney for the final answer. [laughter] how about that? any other questions? >> if i remember correctly, the iranians have a u.s. stealth drone. what are they going to do with that? >> i don't know. what you think? the matter of time you -- of can you spoof it -- i don't think it is a big deal. it. use technology, then you can jus -- you lose technology, then you can change the technology. yes, it is interesting, and we had a great debate here on what is the difference between selling or getting a drone and getting a fighter pilot?
you can make it cheaper, which is one of the issues. but i don't think that is as big a deal in the long term. but that is my personal opinion, don't hold me to. >> thank you so much. it has been a wonderful evening. i think we are all mentally expanded. thank you so much. [applause] >> i hope you at least belief that espionage is going on. host: [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> coming up later today on c- span, talk-show host tavis smiley leads a forum on poverty.
joining him, cornel west, suze orman, michael moore, and barbara ehrenreich. 6:30 p.m. eastern on in this network. c-span2 will have jodi kantor with her book, "the obamas." she will be interviewed by "new york times" columnist david brooks. >> in this episode, we will take a look at rick perry's surprising comments on climate change and the science behind the research. >> there are a substantial number of scientists who have manipulated data. >> i rate different comments by politicians on a scale. if you say something really outrageous, he will get four pinocchios.
something slightly misleading or out of context, as little as one. >> glenn kessler evaluates the truthfulness of political figures and others. >> if a politician says the same thing over and over again, even when it has been pointed out to be untrue, they know they are saying something untrue, and they will say any way. >> it is easy to follow the presidential candidates durso shall media. the two of our campaign 2012 web site and follow what the candidates are posting in real time. read the latest from political reporters, and what the viewers like you are saying on facebook, twitter.com and more. access the most recent video from the candidates at c-
span.org/campaign2012. >> jack abramoff recently sat down to discuss political corruption here in washington. he also talked about his experience of being convicted of felony charges in going to prison due to his lobbying practices. he pleaded guilty to fraud, tax evasion in 2006. from harvard law school in cambridge, mass., this is about an hour and 25 minutes. >> welcome. this is the first of our new and occasional series. i am the director of the center for ethics and a professor here at the law school. as i describe this series, our aim is to have a conversation with a wide range of souls. these are people with a different kind of experience, sometimes a legal expense, sometimes ethical experience.
but for such a conversation to make sense, we also have those who have demonstrated some reflection, and ability to reflect upon what they have experienced and how they can contribute to the work of this center. that, plus the willingness to engage in a conversation that might advance our understanding of the ethical issues that are at the heart of our work. i'm truly grateful tonight to jack abramoff for helping us launched this series. as everyone knows, jack abramoff is most famous and perhaps most infamous lobbyist. he pled guilty to felony criminal counts to a casino venture. he admitted to exchanging gifts
for favors. in june last year, he was transferred from a federal correctional institution to a halfway house in baltimore. a year ago, he was released on probation and now lives under the constant surveillance of our criminal system with a continuing obligation to pay whatever money he earned in restitution back to the government. jacks story has been told in the press and in the movies, including a documentary and a feature film starring kevin spacey. it must have been very cool to meet kevin spacey. [laughter] if you are a junkie for the sort of stuff as i am, after you read his extremely compelling accounts, in his book "capital punishment," i think that you will experience a rashamov effect.
we're here to learn about the institution that he lobbied, congress, and the political system that he so successfully navigated. my aim is to walk through the aspects. if we are successful, it will be in part because we have been able to engage of a man who has been a part of it. he is a committed an orthodox jew.
there is a wonderful story of him being summoned by imelda marcos at 12:00 on friday, and it turned out it was midnight on friday, which meant he would not be able to drive to the meeting, sohe was not able to drive to meetings, so he had to walk through the philippines to the meetings space. if you have been to the philippines, late night is not the place for a non-native to engage in. he was one of the key figures to revive the republican party in the early 1980's after graduating from brandeis. he became chairman of the college republicans and at the same time i was chairman of the teenage republicans of pennsylvania, so i feel a kinship in a weird way.
he has been a film producer, and philanthropist, and giving up to 80% of this income to various philanthropic causes. maybe the best summary of his character is his own hilarious summary of himself. "i was the power lifting, football-playing, orthodox jewish, right-wing republican opera buff. you know the type." [laughter] i am grateful to jack for agreeing to engage in this conversation to help us all understand the there is more. welcome here tonight. [applause] i want to begin the
conversation by trying to get our bearings. i was struck early in the book with two stories that you tell. one, which outraged you, and the other that you passed over without really recognizing any problems. the first one that outraged you was the story about getting the mx missile past. as you recount in the book, you say, yes, sir, what can i do for you? and bustamonte says, the defense department is looking to put in a new base. i hear they are looking at florida instead. they are solidly in my control. what can you expect? and you remarked -- this is your first moment, your first experience of true washington corruption. bustamonte was later convicted and sent to prison. it is not impossible to say that corruption was at least in
part of his soul. put that story next to another story that you tell in the book. about the great richard gordon, who taught entertainment law at georgetown, you talk about trying to get into his entertainment law class. you called him daily for a week. i invited him to the opera. i got my friend who work for the reagan administration had dining privileges at the west wing to give him an invitation to meet their daily. fortunately, my full press was effective and i got a spot in his seminar. this is an remarked in this story. this is just the story of how you got into his class. the thing you found corrupt, bustamonte, i was not quite sure of. he was a congressman working, not giving anybody any money.
here is the deal. i will vote for you if you do this political thing for my district. and now you are suggesting to richard according to put you in his class because you offered him lunch at the white house. convince me that richard gordon did not get you into the class because of that. tell me why that is an problematic whereas the bustamonte thing is deeply troubling? >> i think i wrote about my efforts to get into a class. when i look back, i think they're probably some law schools who think about lobbying to get into a law class is not something that everybody has in mind. but that is what i was doing. you are right. at a certain level, this is kind of the same problem where one is bringing extraordinary means and irrelevant benefits
into play to try to achieve a goal. i was 22, 23 perhaps, when i was there an bustamonte called me into his office and hit me with this. and as i discussed in the book, i was shocked that he would say such a thing. but he would give the seven boats for a naval base. i think i was naive and folks at the white house probably thought i was silly about calling and asking that question. of course, they approved it and then reagan got the mx missile. on the other hand, i went about doing similar things. a think the distinction i make in my mind then and maybe now
come to some degree, but certainly then, is that, as i look back on it, my whole career became one of using my skills, whatever they were, to lobby to get public servants to give out comes. in this case, he was a public servant trading arguably for the benefit of his district, by the way, and i would, in parsing it, viewed it as a citizen try to get ahead. at the end of the day, it is the case, whether one is doing that or offering candy to trick kids to come into your store so that parents by, at some level, there is a bit of corruption there. we have to confront each of these in our daily interactions
and decide what level are we willing to play at. >> but when you said there was possibly a problem with what richard gordon did, he said it was because it was something irrelevant about the gift being offered. >> it was the related to the underlying issue. >> but i wonder if that is not too high a standard to apply in the context of politics. do we not have to have some politics that we can call non- corrupt or is it impossible to imagine? >> i do not think everything is correct. -- corrupt. i think lobbying is a good thing. i think lobbying is a cherished right that we have in a constitution. we can call on our members of congress, or have an agent to do so, or band together.
it is where money gets mixed into the problem. >> bustamonte did not have money on the table. >> in a certain way he did. he was delivering jobs. i guess this was unusual for me. the horse trading up it all seemed to be so bizarre. we were trying to convince people -- my job at that point was to convince members of congress to vote for a program, the mx missile program in this case, and i was lobbying on the merits in those days. later, i discovered that marriage are interesting, but they do not usually win. -- merits are interesting. but in those days, it was merits. he said that he would give an outcome that i desired for something that had nothing to do with the merits of the mx missile. >> we can certainly agree that, when the relevant issue of money, campaign contributions or cash in your pocket, both of
us think that raises troubling problems within the system. one striking fact in the book, when i was looking at this, i was much more charitable in my interpretation of what must be going on inside the system. your account of the role of money here is not charitable at all. you even said -- first of all, you said that it is natural for people inside the system to expect that they need to be rewarded. with are benefactor's contributions. and you say there's no question that these contributions had a significant impact on this process and the impact is not positive. we have a department here at harvard that would question that. but i think you may have an insight stronger than the department.
and you say "that contributions in legislation are nothing but bribes inside of the system even though these are not for personal gain, but political gain." i found it interesting how you lay out how the distortion gets played. you talk about tom delay meeting with a microsoft representative and suggesting that they needed to help out with the republicans to keep the republicans in power. and then delay says, freshman, he told them about approaching wal-mart for contributions. "the director of wal-mart said that wal-mart did not like to sully their hands with political involvement.
staring intently at the microsoft involvement, "a year later, that representative was in my office asking to intervene to get an exit poll for the federal highway. i told him i did not want to sully my hands on such a task. you know what? they did not get their ramp. and they never will get their ramp. as we would often say in the lobbying business, they finally got the joke and a $100,000 check was soon thereafter delivered to the republican congressional committee." my view, that is extortion. that sends a clear message saying that you play along or you do not get what you need. >> most members of congress were very subtle.
i did not need to get these speeches from the because i got the joke myself. when i was lobbying, i was doing what i could to raise money for whoever it could. we raised millions of dollars. but other lobbyists need to be reminded what the standard procedure will be. they will work with you on any issue or agree to support your bill and say, you know, by the way, i am holding a fund-raiser next tuesday. i am not sure if you got the invitation or not. that means, you better come up with some money if you want me to keep doing this. the delay was known as the hammer. he did not mince words. eller holmes norton was
infamously caught on tape calling a lobbyist just last year saying, i do not know if you know this, but i am the chair person of this committee and your coming to our committee for results and i cannot believe that i looked at my card in your not all lists. why are you night giving me money? sometimes, it is subtle. and sometimes, it is very much out front. they are soliciting bribes in essence. unfortunately, it is spread throughout the system, whether they're subtle or not. >> is it your perception that it was always like that or it grew during a stern period? >> i think it was less subtle years ago. my new lobbyists who were active in the 1950's and 1960's and it was less subtle.
there would be members of congress, you want to sit down with me? where's the check? it was not a $52,000 check. it was $100,000 in cash. it was more outrageous. i think today, one of the ways that members of congress get around feeling horrible about these things is that they are trying to make it out to be something other than what it is. i am having a fund-raiser next tuesday night. if you happen to be in the room and there is extra money falling at of your pocket. so there are more subtle. that make it easier to feel good about yourself.
>> so they are asking for money for things i do not directly benefit them. is it your perception that it shifts away from the kind of blagojavich or cunningham type of corruption -- what we do for my personal checking account? add more toward how do we exercise influence for these things that benefit me? >> cunningham and blagojavich and bob ney, even, who have their hand at and want you to actually put money there -- that kind of stuff is rare. but the fact is that these members are not asking for contributions to something that they're interested in. this is for charity. oftentimes, these charities will hire their wives or their
children. if they're asking for money from the republican or democrat congressional committee, it is because there is a requirement. they are raising money for things that they are involved in. it is not directly into their bank accounts, but it might as well be, really. >> when there's this story that you tell. money is one technique that the lobbyist can deploy. many gifts become another aspect. you describe how lobbyists with great influence and certain representatives can cause the advent of congressional hearings and to do so utterly destroy in.
it could be up to a million dollars for this kind of hearing. this is the kind of weapon you can deploy to guarantee that people lined up in the way that you want. >> yes. i think those people do not think about the fact that the government has become a weapon for people. it is not merely a weapon to go fight wars. it is a weapon to fight wars at home. and i am ashamed to tell you that sometimes this was the kind of lobbyist i was. if somebody called up for a hearing -- people think that house and senate hearings are like trials. you go up there and get a fair hearing in their things and the door -- it is not. most hearings are designed to achieve a goal that is not ever expressed. in the sense that lobbyists would pushing hearing, it would
be for the purpose of putting your opponent, whether that might be, in the deep end and setting them back. a hearing that could theoretically landed in prison, by the way, if you perjure yourself or even if they decide to hold you in contempt of their body, the house or the senate. they have big jail cell in the building that they can put you in. by the way, when i was called up for my hearing, the cell was there. it can destroy your reputation. it can destroy everything you have. but even after this route, you will spend $1 million preparing for your hearing. you will spend weeks and weeks not sleeping preparing for your hearing. you will not do anything that might be a problem, meaning any thing that your opponents might use to come after you. so it is one way to disable your opponent. unfortunately, it is done all the time.
there are about 35 standing committees on the hill. and they hold hearings everyday. multiplied that out and you see how the lobbyist is able to play and how special interest are able to play in a way that most americans are completely unaware. and the people who get called to these hearings, who pays them to be going to these hearings? >> like their expenses. if an ordinary person might from boston or california -- >> sometimes the committee will pay their expenses. not if they are not a target. >> we often think that the most important influence is the influence of a member. by using the the most important influence is the influence of a
staffer's. >> right. >> and if you can signal to the staffer -- jim cooper, democrat from tennessee, described congress as a farm league for k street. then you have a very valuable resource. his pay check may have been signed by congress, but he was already working for me, influencing his office for me. a perfectly correct arrangement even though no rules had been broken, at least not yet. is this just a jack abramoff innovation or is this a common practice? >> i did not indicate anything. as i look back on my career -- i did not innovate anything. as i look back on my career, i
learned everything i did. i may have pushed some of them over the normal boundaries, which is what got me in trouble. but there are a lot of smart people in washington and they think about everything. one of the reasons that lobbyists laugh about the approach to reform the system it is because no matter what people throughout the system, they will overcome it. one of becomes immediately apparent when you are a lobbyist or when you're working with congress, the truth is congressman used to have no staff. the great leaders of our past wrote their own bills, wrote their own first comments, led their own meetings.
like corporations and other places, the staff runs the show. that becomes apparent to a lobbyist immediately. the ones who make the decision will give you access to the staff. you have to figure out very quickly that most members of congress are pretty lazy. they do not want to do the work. the run for office. they love the camera. they want to be on tv. they want to raise money. and they want to win their elections. but they do not want to do any work. they certainly do not want to read the bills. that is for certain. >> why? i cannot understand why. [laughter] >> because they are reading comic books. >> they have no time for the bills. >> they are not really running the trains. the staff is. so when i started building my lobbying practice, most people would try to hire congressman because of the marquee value of the name and things like that.
i had a different tact. i would never hire a congressman. i hired one congressmen. i was asked by the leadership, a nice guy who could i get a job. i hired him. but he turned at to be utterly worthless. i always hire staff because the staff was hungry and they were killers. and that was the operation i had. what i noticed and what i wrote about in the book is that i would hire staff from the work immediately because i needed it. so come to work tomorrow or come to work next week. but then i started hiring chiefs of staff. when do you want to leave the hill? i know what to leave for two years. ok, in two years, i will hire you. i hired them right then. the moment they knew i would hire them, their whole job change. they're human. you know you are going somewhere else. you have to be at least be thinking about the next job. you do not want it to go away.
so what they do, and portola, the real corrupt parts of the system and a completely legal and unknown entirely -- when i tell people this, they look at me and it is obvious when i say it, but until they understand it, the staffer becomes my staffer. those staffers can never become lobbyists. >> if you think about -- what is striking about the problems you described in the book is that they're completely unrelated, logically at least, to the actual crimes you're convicted of. >> right.
>> you were convicted of crimes -- this may be an innovation that you want to be humble about, but mike scanlon, whose job was to recruit business leaders who might be affected by some particular legislation so you could produce 5000 very powerful people overnight who would call upon this person and say, no, you cannot possibly do this. that is a steve jobs kind of thing. why did not everybody do this, but nobody was doing it. but you failed to disclose that you had a financial interest in that firm. that is one of the things you were convicted of. there is tax evasion because you're diverting funds to charity.
and you had -- but none of the problems you're talking about had anything to do with your particular crimes. you could be describing lobbyists who never crossed the line at all and yet are producing all the problems you are talking about. so they're not criminals that are at the source of this problem. >> there are very few criminals, very few bill jeffersons and jack abramoffs. i could not care for the line was. i just wanted to win, so i just kept going. there are some lobbyists who are lazy, too. that keeps them from becoming criminals, for better or for worse. i try to focus people on that it is not what is illegal, but what is legal that is the problem. the lines in the sand are so
ridiculously drawn. what is legal in this system is the problem. that is where america's attention should be focused. >> i want to outline the reforms you have outlined. then i want to hire jack abramoff, the lobbyist, to war game those reforms. if they were enacted tomorrow, now i wanted an expert and a 1 allele side of this time. i want an expert lobbyist to help me get around this reform world. the reforms to describe our key ones that i think are very important. number one, you want to eliminate entirely any
contribution by those lobbying the government, participating in federal contracts -- you do not want to limit it. you want to eliminate it. you should not be able to give some much as $1, zero, you can make a choice. if you want to get money from the government, but you cannot be giving. that is one important category. next, you want to eliminate the revolving door. you should be barred for live from working with a lobbying association that does work with the government.
number three, a term-limits proposal. no. 4 is repealed the seventh amendment, which made senators elected so now we have -- originally, they were appointed by the legislature or the governor. sir repeal the 17th amendment. >> also, all laws -- >> all laws need to apply universally to everybody. right now, congress exempts itself. so we have those reforms. congress has now passed it. overwhelmingly, the president has signed it. now i hire you, jack abramoff, to get my special-interest legislation through the system. what do you do? >> not going to break the law. [laughter]
so what does a lobbyist to do in a non-corrupt environment. >> well, in this environment. >> if money is removed from the system, as a lobbyist, i have no ability to convey any money or gratuity or anything that could cause gratitude on the part of the public servant toward me and my client. >> but you are not being creative enough, jack. you cannot tell me that you and mike scamming could not together a very nice operation. -- and mike scanlon could not put together a very nice operation. nobody who gets the benefit that the rest of us don't get can get any money.
>> who are the six people in the united states that does not get some benefit from the united states government? >> when i say benefit, i do not mean social security checks. i'm talking about grants or contracts are getting special favors. >> what about wall street? >> yes. >> wall street can i get any money either. >> any body that gets special attention from the federal government is exempted from giving money. can i give any money. >> -- cannot give money. >> will who cannot give money? >> farmers cannot give money. there are some who believe in certain congressmen and uncertain causes. let's take legalization of marijuana. [laughter]
i want to have congress legalize marijuana or i want to have congress to ban abortion or do something in the general sense but applies to everybody. it does not apply to my company, my industry, or create a financial incentive for me. i have not drafted legislation nor am i going to. >> i have just hired you. >> i am not a drafter. i have people who do that. but the world that i am trying to get to and that you're trying to get to and that any reasonable person is trying to get to is where bribery is taken out of the system. republicans want to cut the taxes of the very rich.
>> the wealthy are getting a tax cut. you will see in some things that i think are special- interest and vice versa. it is hard to drill into the details of this. i did not create my book in that way. i should maybe mentioned that, how i came up with these things, these bizarre kind of suggestions that are the opposite of what i used to be, i came up with them in the walking track in prison while i was thinking, what if i were still a lobbyist? what are the kind of reforms would i try to stop? who would i try to stop? the kind of reforms they have
now, you cannot buy a congressman a meal. if they sit down and they use a fork and a knife and they eat on a plate, that is a meal. but if they stand up and they use their fingers, that they can do. they consider that a reform. you cannot buy and sell a $25 hamburger. i can i go to lunch and have a hamburger with you and it is $25. but if i go to a fund-raising event and i have five $5,000 checks and say, here you go, that is completely legal. in no way is that reform. so what are the kind of things that i would stop? so putting aside the details of it for now, obviously, you drill into these things and they become difficult. but there are plenty of great
minds who can do it. i am not one of them. if i were in a system where money was removed, where i could not get money, i could not buy them lunch, i could not take them to see the washington redskins -- although i am not sure that was ever a benefit to anybody -- i could not take into a football game or play golf or do airplane travel or anything anybody could do if they walked in, then everything is on the merits politically or philosophically for them. >> i have no disagreement of the effectiveness of the narrow question about what lobbyists need to be allowed to gift or not a gift or give or even the idea of taking lobbyists' out of the business of giving money. charles fried came up with a proposal which is essentially the same, that lobbyists should not be in the business of raising money for people that they lobby. that is fine.
but the question is whether that alone is enough. the way you have made it more than that is that it feels that you have written this morass in trying to decide when i am allowed to be giving whether or not the issue is special interest to me or a general interest. is a tax carrying the same interest as the [unintelligible] is that a special interest or a general interest? i think that is the morass. a think the ball -- i think the alternative of having a more creative funding system would not be as effective without being so restrictive on the freedom of people to participate in the political process. here you are, jack abramoff, a libertarian, telling all sorts of people they cannot
participate in the political process because they have a special interest. but the alternative is, what if we fund elections with small contributions? the fair elections act now says that you walked into a system where you get $100 from racism and that is matched by the government. -- from a citizen. i will rebate you $50 of your taxes and you can use that as a voucher to give to people only take a voucher, plus $100. but all of the funding comes from small dollars. in that system, would we have to worry about the particular benefit i might get from the government is a special interest or not? >> i do not know. i am open to that. [laughter] anything that gets the money out of the system, anything the
removes the bride's, basically, is worth considering. there are philosophical issues, like people interested in public financing and things like that. i think the essential message i'm trying to put forward is that, to stop the corruption, you have to take up the money. that is what i used when i was being corrupt. that is what does it. that is the deal. >> thank you. we would like now to invite people to participate. our strategy for questions in all of our events is that i will control the queue. i will signal to you and you will get the mike and you will speak. let's start with to dennis. >> dennis thompson. several years ago, i wrote a book called ethics and congress.
it obviously had an enormous impact on washington. [laughter] >> my favorite book. i saw the movie, too. >> we are waiting for the movie. kevin spacey was otherwise occupied. [laughter] this goes to something that larry was touching on. why should we pay attention to somebody who is convicted of a crime that has actually nothing to do with the reforms that he is proposing? we do not ask barry bonds' about how to make baseball better. we might ask him about how to avoid the temptations of cheating and violating along. -- the law.
and we might ask lobbyists like you about how to actually get reforms through. larry was hiring you. he was lobbying you for his proposal. [laughter] but you did not answer that. what you did was a book and do listed half a dozen proposals which i am not sure you are in the best position to suggest. i want to know what is the connection between your recommendations and your experience. one recommendation that larry did not mention and you did not mention, the major one in the book, is that we should have a smaller government. that sounds like the plague of political parties -- the plank of political parties. that again i am not sure how that follows with your experience.
>> i appreciate your question. i have done two hundred interviews since i first got out of prison. i was in the middle of the world. in terms of -- people ask me how do we know your sincere? how do we know you were telling us the truth? my responses that i am not sure it is important that you know that i am sincere or not. i am not here to win a popularity contest. i do not think that i will win any popularity contests in the next century or so. but i do have the experience in this world and i have been there where a lot people have not been. once i had the benefit of a to buy for cracking in the head, i came a little bit to my senses -- a two by four cracking in the head, i came a little bit to my senses.
i have something to say about it in the sense that i have been there. in terms of the smaller government part of it,there are 30,000 lobbyists. not because the government is the size it was in 1912. it is because the government is the size it is in 2011. the frustrations that people have is that they're just too many people lobbying, there are too many special interests. i would posit that one of the reasons this is the case is that the government is involved in a lot of things. so when i say that the government needs to get out of a lot of this stuff, sure, i believe in having a smaller government. i am not big on government to begin with. i had to live with the government for two and a half years and it was not fun. but i believe that that is the
system that is warning to get rid of the senate -- the special interests. but lobbyists -- what lobbyists want, by the way, and what i wanted to some degree is that you want power concentrated. if you could have it, you would have one person making every decision and then you could go lobby that person and make sure that that person is in your pocket. >> right here. >> my name is irwin shapiro and i have not written any book of relevance. [laughter] i have to questions. it seems to me that there are three functions of the lobbyist -- three weapons that the
lobbyist has. one is the broad, too is the threat, and three is the sick leave -- one is the bribe, two is the threat, and three is the sick leave. -- fig leaf. a ladder is the excuse of a rationale to do the unbelievable. do lobbying firms have special teams whose sole job is to develop the fig leaf or develop the cover story? or is it just generic in any lobbying firm? >> it is generic in every lobbyist. you want to give political cover to whoever you are asking a favor from. you want to make sure that they have the political cover necessary to get away with it, basically, to do it with a straight face.
even something that is reasonable and good and wonderful, that always becomes part of the discussion with congressmen and their staff. how can we do this in our district? my view was 40 to 35 congressmen represent the entire country. to me, it was nothing to go to a congressman and i want to get something done in florida. congressman and not just for the district. there for everything. so lobbyists come up with reasons for why that is the sensible at home. -- defensible at home. >> how would you foresee reforms like you suggested
actually coming into being? have you got any master plan? >> i did not know that was important. [laughter] it will be difficult. let's not kid ourselves. you're asking the very people who benefit from this life style to get rid of this lifestyle. ultimately, it will be a question of the media shining daylight on this stuff and exposing it like what "60 minutes" did with insider trading. until they did do that, nobody was thinking about that. when i was a lobbyist, we heard about members and staff and they would come in sometimes and said i made a killing in defense or something like that. there will be a big bill. frankly, i thought there were knuckleheads buying 100 shares of something and making $200. who cares? it didn't dawn on me. i did not focus on what they're saying. but it was insider trading, legally.
but until the media started talking about it, nobody was doing anything about it. then the bill went from six sponsors to 50 something sponsors in a week. if the media continues to focus on the space -- mind you, this is probably what accounts for the fact that congress has an approval rating of under 10%. people look at the congress and look at the government and they think that you guys are a bunch of jerks. you are a bunch of blowhards were getting rich on our dime, usually, and it is not fare so they ignore the system or they get angry about the system or they got an -- they get out and occupy something or they get 80 party or they organize an election. >> at harvard law school in the 1970's, i hooked up with stanley surrey.
i became a tax analyst on capitol hill. years later, i was sitting on a board of directors in los angeles with alfred bloomingdale. i spent a lot of time with that plan and i ended up on ronald reagan's kitchen cabinet. did they have much of an impact on you? you came from the same neck of the woods, i gather. that is a culture by itself that has not been discussed. but to ignore that culture, that was unique. >> my father was president of the diners club franchise. i met them a couple of times. but i do not think he had a big influence on me. frankly, i did not meet any of the others until toward the end of their lives. it did not really impact me.
what shipped me more than anything was my experience at brandeis university where i basked in right-wing political bought activism -- political activism. >> here in massachusetts -- you mentioned lobbying at the state level. in massachusetts, we have no problem with corruption, except for the occasional speaker of the house. because of your background in law being around gambling, i would be interested to hear if you have any insights into recently -- into recent legislation passed in massachusetts to authorize gambling. there was some opposition to it, but it was roundly defeated. what should we have been looking for in the lobbying process here in massachusetts?
and what should we be looking for? what should we be alert to in the ongoing decisions that will be made about where the damage will take place and who will get to profit from it? and how would we go about getting that information? >> everything about the gasoline industry is politics. i spent a lot of my time stopping -- everything about gambling industry is politics. i spent a lot of my time stopping gambling. i do not know what happened here. i have not followed it. but stopping gambling is easier than getting something through. the fact that they got it through is remarkable. generally, it does not happen. i am sure there was a lot of money involved, obviously. these campaigns are not cheap.
in terms of going forward, what you need to be watching for? i think that is probably coming to the degree you can, you want to try to get some legislation through that is doable to prohibit anybody in that industry to giving any money politically to anyone in your state. they did this in new jersey and they kept casinos for years without having any real political power in the state, other than as a an employer. to a degree that it is possible, if i were at this point trying to do something to control it, i would try to prohibit them from giving any money politically at any level. even at the local level, giving to a mayoral race or something like that, these companies can have a tremendous impact. do not forget what kind of trash gets kicked out of a casino. -- cash.
i do not know if it is one casino or several casinos in the boston area. >> it will be three casinos. >> it will likely be very lucrative. if they are smart from the other side, if i were the casino, i would use my money to consolidate political control so that, number one, it could never be undone, and no. 2, when i wanted to expand, to do it, and number three, maybe the most important, to make sure that there are not pork in it. -- not four casinos. >> i have not read the book. can you talk a little bit about the conversion process, the personal reflective, self inquiry-driven conversion process to have gone through to get to replace where you saw what you have done before and as the savory. and can you talk about what it is like to be the object of so
much shame and derision and whether you -- and what your hopes are? >> i would love to say that, in the middle of my lobbying career, was making but loads of money and it hit me all of some -- all of a sudden that i should not have been in that business. but i cannot say that. it only hit me once i was out of that business. maybe i am the kind of person who needed the entire house caved in on them before they realized that there were living in a house of cards. but that is what happened. with me, my aunt came rather suddenly, -- my end came rather suddenly. within a couple of months, everything was obliterated. it probably took a that.
and then there was the two years in prison. for two years, i sat and basically tried to work through what was going on. what did i do? first, i thought what are they talking about? i did not do anything wrong? i just did what everybody else does. i just did more of it. so i had 72 seats at the rangers stadium. what is the difference? that is the first thought i had. well, the first thought i had was that this would blow over. it was a little bump in the road. it was no problem. but when the first "washington post" article came out saying that i try is a lot of money to my clients, it was just like "the new york times" putting
out an article saying that i had website. the first article was should we put this up on their website? is the picture okay? it was that kind of stupidity. it was a different universe. i thought it would go away. basically, i was in denial. that did not last long, by the way. very quickly, i was able to somehow subjectively sit down and get out side of myself and look at what i was and look at what i was doing. i do not want to say that everything i did was wrong. it was not. certainly, most of what i did was legal. most of what i did in life, i do not think was wrong or bad.
but i was involved in areas that were bad. and those are the areas that i went to prison for. and the things that i went to prison for, i was wrong about and i regret all of it. but it was not a matter of -- i had to look exactly what i did that was legally wrong. i took the approach of let me look at what morally and should have been doing. the things i had studied my whole life that i had somehow separated. i separated by religious and philosophical beliefs from my activities. i'm not the first person to do that, obviously. many people do that. but the fact that i did it, when i woke up to a, it was dreadful and terrific for me. -- a horrific to me. and i was in depression. i never thought i wanted to
kill myself, but i thought, gee, what did not be better if i were -- wouldn't it have been better if i was never here. that is a horrible feeling. but i have a family. i have kids and wife who are also suffering. my mother and my father -- my mother passed away, unfortunately. but it is a process and it was a necessary process. by the time i had gone to prison, i had reconstructed my belief system. i had not been able to speak about it because the media was not interested in hearing from me, to be honest. i became a cartoon. i put on a rain hat because it was raining one day. i went to the courtroom. here is an idea of what it is like for someone in my shoes. the media sits outside your house. they accost her family.
where are you go, they rush you. the paparazzi are not decent journalists like tom brokaw or things like that. what they want is for you to look at them because they want to get a picture of you looking at them. they will scream stuff that you that is unimaginable. or they will cost you physically. they will make you walk into them. i am not as strong as i used to be, but i am not completely week. so i started walking right into them and knocking them over. they ran away. i did not care. that is a weird and horrible situation. so i went to court on a big day. it was january in d.c. it was cold and raining. i got up early. i left my house in the dark. i got to court hours before my
court appointed time because i wanted to beat the media there. so i grabbed a hat. i am an orthodox jew. we have hats. it is part of the deal. so i put on his hat and upon his raincoat and i left. my wife was sleeping. she would have said, where you nuts? i went out and i walked in and there was none of the media there. i had some things on my mind that day. i was pleading guilty to crimes and going to face the fact that i was being taken away from my family. so i finished and i was with the justice department and the fbi guy who treated me very fairly and very appropriately, never abused me in any way. i know that happens, but it did not to me. i put my hat on and my coat on to leave, thinking, ok. and i walk out and the media starts screaming at me. are you a gangster? are you a mafia guy?
who are they talking to? no mobster dresses like this. and it was me. oh, my god, i should not have worn my hat and coat. and i became a cartoon. i could not talk to the media. i could not talk to anybody. but before i got to prison, this is what i was thinking. i was thinking, you know, i am part of a system -- i am probably the razor's edge of a system that is destructive and is against everything that i have always thought about for our country. whether it was greed or power or wanting to win, whatever it was, i should not have been there. i should not have been doing that. and i am about to get punished. i knew i was going to prison. and when i went to prison, i did not know how long i would be there. it was not until i was there for 22 months that i was given my sentence. every night in prison is terrible. but to be there and not know when you are leaving prison is
indescribable. finally, i got sentenced and i got more time than the justice department even asked for. ok, that is fine. i went back and i did my sentence. but when i was there, that is when i started doing my thinking. it is not enough that i know that i am wrong. it is not enough to know that i will never do that again. obviously, i will never do that again. who will hire me as a lobbyist on capitol hill? lobbyist jack abramoff hidta see you -- here to see you. [laughter] it does not feel good to hear things about yourself like this said about me. and they are still saying. i guess you get some thick skin, but you don't get that fake a -- thick a skin. but i should not be hiding. i should not go away.
i should come back and do something about what i was doing. in my head, i had experiences of that world that are all like a -- unlike a lot of the people in our country. most of the people who know what i know are scared of talking about it because they are making money with it. i have been attacked pretty severely by my former world, not that i care. a lot of people do not want to hear what i have to say. not for the reasons that they think you're a criminal or a felon or who cares about you. i understand that. but from the point of view of shut up, abramoff, go away and die, and get out of here, you are ruining it for the rest of us. i do not consider myself part of that rest of us anymore. i i consider -- i consider
myself a part of the rest of us. [applause] >> jay livingston. your own capital athletics sign -- find funneled $40,000 to end illegal settlers -- fun and funneled $140,000 to its illegal settlers polish and equipment and fighter train even though it was not a charity that performed what it stated what it was going to do. why is it that unscrupulous people like you and tom delay feel so close to the plight of israel? >> i do not know. i like ireland, too. i do not know how to answer you. we do not agree on israel. what can i tell you? i went to jail for misusing nonprofit money. i am sorry i did do it. but i am unabashedly for israel.
>> [unintelligible] >> they were not settlers. but we will have to agree to disagree. >> i am tom ferguson. i was with you on npr a couple of weeks ago on a program on insider trading. i just want to ask you about the analytics of this. it is a very interesting discussion. there are a lot of folks who try to understand the logic of lobbying and have trouble trying to trace it through what they think about how does a congressman or woman price the services they're doing. i ask because of what you look at what is paid and what they get, you get some odd cases. i will make it 6% of the defense budget one night for two hundred thousand dollars. then a week later, somebody will contribute $1 million and get a gambling resort for something like that.
could you shed some light on the process under which you might call the pricism. >> i do not think there is a rational answer to the question. it is a good question. but my experience is that those members of congress, which is most of them, who are into raising money and trying not to necessarily do what they think is of an illegal quid pro quo, they are just trying to get as much money for anything they do, no matter what it is. if $1 million is available, they will try to get $1 million. if $100,000 is available, they will try to get that. i do not know that there is necessarily a rationale here. it is more that congress fears not being reelected and not
dancing in the system and not becoming a committee chair person. they will try to get whatever they can get. so it is not necessarily a pricing system. >> let me push a little bit more on the question. it is a very good question. it is one of the puzzles on whether money is it the center of the corruption. one form is that the prices so low. in your book, you talk about the return on been -- return on investment that you got from lobbying. you got some huge percentage return on investment. an economist would say how was that possible? why is it so irrational?
does the government not hold out for more? if i am going to get a $1 billion subsidy, which people get because of the tariff, you should have to pay lobbyists more than just $1 million for that. you should be paying half a billion dollars for that. >> because they are dealing in stolen goods. in essence. this is not a normal business. they are taking things out of the public trust and selling them. you're not going to get drupe cunningham this way -- drew -- duke cunningham this way. >> can you walk us through -- presumably, there are some idealists who get elected to congress to go with some public interest in mind. can you walk us through how you
go about correcting them? -- corrupting them? [laughter] what is the rhetoric of that conversation? how do real them in -- how do you reel them in? >> when any member of congress shows up in washington these days, the first thing they meet is not a lobbyist. the meet their leadership. and the leadership introduce them to their lobbyists. and they do it this way. you're a new member of congress. the most important thing for you is to get reelected. if we lose your seat, then we will have to fight to get back the time after that. so that is the most important thing. since most of them, 80%, come with the debt, the first thing you have to do is retired your debt. this is even before congress has convened. i am talking about december, after the november elections. here's a group of people who are very good at retiring your debt.
meet the lobbyists. that is where it starts. even if they are the best folks in the world and they have the greatest -- by the way, some of them will say it. i am not interested. i will not get involved of that. the first year. but then there's the second year. but in 20 years, i will take that two thousand dollars, but i do not sell my vote for two thousand dollars. they are wrong. they sell their vote for a glass of water, not consciously, but they are human beings. if somebody does something for you and your your decent person, what is the thing you wrote think in your mind? going to thinkre in your mind. g. thomas -- g, somebody did something nice for me. you can be a decent person -- i will root for them.
i cannot do that, but maybe i can do this. that is how it starts. it is not a moment where somebody walks in and gives 50,000 votes in casino chips. -- $50,000 in casino it ships. that is very rare. what i just described you is virtually everybody. it is just a matter of time before they're beholden to the lobbyists. >> thank you very much for being here. i am a professor of pathology at harvard medical school. there is probably a lot of agreement in this room that the root of evil is the money. that is what you were saying. but if a miracle were to happen and there was legislation passed -- as some have been trying to do for a very long time -- to make the system a publicly funded system and get rid of some of the temptation, do you not think that the
supreme court would rule lit a first amendment violation? in other words, there seems to be a hopelessness about the road to a solution for a problem because for which is rarely understood and excepted. -- a cause of which is very generally understood and accepted. how'd you get rid of it? >> in north carolina, it bans -- there is an interesting case in north carolina right now that the fourth circuit has affirmed. it bans lobbyist contributions in north carolina. it will be interesting to see where that goes. but somebody who chooses path a, their rights and not taken away. they're making a choice whether to engage in lobbying or what ever they are doing. for them to forgo on their right, you do have that.
it may seem that that case in north carolina may be a seminal case in this regard. it does bring hope that, obviously, if the supreme court says that will not work, we will have to look at other remedies. there are ways around the supreme court, too. they're difficult. there are constitutional amendments. and they're almost impossible. how many times -- when was the last time the constitution was amended? it is certainly before most of these people were born. it is a difficult process, but i think there is an opening here to go after it. we will see what happens. >> but david was asking about public funding. that is something you, for a moment, open your eyes to. what you're talking about is limits. you want to limit people from participating. and you cannot in your heart of
hearts believe -- you may have a very accurate political judgment about the likelihood of public funding -- but you can really believe that, if all we do islam is, the the wealthiest 1% will not find -- if all we do is limits, that the wealthiest 1% will not find a way around it. >> there are guys who sit around trying to work their way around the system. i sat with them in prison. and they have been prosecuted. i do not want to see people in prison. but that is the penalty for playing games. let me tell you why i am against public funding. first of all, i am a libertarian-time conservative. i am giving them a choice. nobody is forcing anybody to be a lobbyist. i was not forced to be a
lobbyist. people make a choice. like all things in life, you give up things a few choose other than. -- if you choose other things. but in terms of public funding, i have a distrust of the government. i have to be honest with you. they say that a conservative is a liberal who is mugged. well, a libertarian is a conservative who was indicted. [laughter] i am not trying to disparage everybody who works for the government. i left incomplete government control. maybe that does influence -- lived in complete government control. maybe that does influence my opinion. but generally, i do not like the idea of putting in the hands of people power to make decisions. >> but then vouchers do not do that. >> i said i was more open to vouchers. >> when i read your book, i
thought that was more than the franklin approach. that is something i would be much more amenable to. i think it is very important that we talk about getting this stuff fixed. we need something that people on the right and people on the left will be able to agree to. to overcome the bitter political divide, we need something both sides can get ahold of. i think that might be one way to do it. >> i am jeff bridges. i am a student at divinity school. before was there, i worked in politics for 10 years. it really sucked my soul dry. i think you understand. coming here and going to divinity school, i got involved with occupy harvard. it was a redemptive experience for me. i came here thinking, it is jack abramoff who wrote a book to make money. that is what you do.
something that happens and you write a book. but when you talk about your experience being arrested and reflecting on how you operated as a lobbyist, it really spoke to me. i believe you. i buy it. i want to know why you're doing what you're doing right now. what you hope to accomplish with the path you have chosen now. >> as i said, what i want to do is that i have some role to play in solving this problem. it is a problem. it is something to recognize that it is a problem. you all recognize it intuitively. i am ashamed that i did not. not only was i in it, i may have read it. -- the lead it. so what i am doing now, as hard as it is -- it is not easy to sit here and say everything that i am saying to you all.
it is not. you're not the only ones i am saying it too. i have said it in front of big tv audiences. i have to believe in their heart of hearts, my family probably wishes i would not say it. they also see -- none of my kids -- i was very political. my wife worked for the republican national committee. not one of my children wants anything to do with american politics, not just because of what happened, but they think it is utterly hopeless. so i want to do something for them. i want to do something to try to move the ball forward. i will not do it by myself. i wish i came to this when i was where i was. when i sat in prison, all you
think about is how do i get out of here. even an hour earlier, just, please, god, get me out of here. it is impossible to describe what it is like. 24 hours a day, people screaming, six men in a 150- square-foot space. it is a nightmare. you're thinking every minute how to get out of here. of course, i was thinking, don, why did i not think of this when i was a lobbyist -- darn, why did i not think of is when i was a lobbyist. i could've had the laws changed. and figure some way to have gotten me out of here if this had happened. that is silly. but i often sit back and think, would if i was still in that game? i could really do some damage. and it occurs to me what has occurred to me since.
i obviously, i am not there, and i cannot. so i can speak about it. and i wrote about it. i have a book out. i have a $44 million restitution order. this book would have to outsell the bible for me to see any money. [laughter] i did not do to make money. people are not making unless your rawlings or whoever. i'm not making a lot of money. i did it to let people know. and if they know, maybe they will get angry. and if they get angry, maybe they will do something. and maybe, maybe, this great country -- and it is a great country and a great people -- will rise up and demand change. >> the last question. make it really, really good. >> a lot of pressure now. [laughter] you were saying before, when your story broke, how you were in denial and you were in a different world. i wondered if you think that
politicians and staffers are equally in the nile in a -- in deny all -- deny all and in different world. >> yes -- equally in denial. >> yes. absolutely. think about folks who can go around trading on insider information and buying stocks on the one hand and then read in the paper that raj rajeratnam gets arrested for doing the same thing. natalie do they not feel bad about it, but a few good about it. -- not only do they not feel bad about it, they feel good about it. and by the way, i do talk to congressman still. they're quiet about it. no congressman wants to be seen talking to me. they do not get it. why is it that we are so
unpopular? why is there a 9% approval rating? how is it possible that obama has a better approval rating? are you kidding? they totally dissociate themselves from the reality that everybody else in tbilisi's. as did i -- everybody else intuitively sees. as did i.. so i understand it, and i feel bad for them in a certain respect. >> jack abramoff, thank you for coming. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]
>> a couple of live events happening later today. starting at 6:30 p.m. eastern, pbs talk show host tapis smiley -- tavis smiley host a forum on poverty. it starts live here on c-span at 630 eastern. and on c-span-2, judy cantor discusses her new book, the obama. she is interviewed by new york times columnist david bruck. you can see that live at 7:00 p.m. eastern here on c-span-2. >> in this place, we will stand
for all time. among monument to those who fathered this nation and those who defended it, a black preacher, no official rank or title, some have gave voice to our deepest dreams and our most lasting ideals. >> saturday at 9:30 a.m. eastern, president obama is joined by civil rights leaders and the king family for the dedication of the martin luther king jr. memorial on the national mall. also, saturday at 6:00, civil war scholars look at the direction of the war, as well as northern and southern strengths and weaknesses at the end of 1861. sunday at 3:00, oral history. senator john kerry became a vocal opponent of the vietnam war. his story on american history tv this weekend on c-span-3.
this weekend, a book tv looks at the life and legacy of dr. martin luther king jr.. saturday at 6:00 p.m. eastern, congressmen and civil-rights activist john lewis on "walking with the wind," un memoir of the movement. jonathan writer examines the many speaking styles of reverend king and we discuss the manhunt for james earl ray. also on the tv, new york times washington correspondent joe decanter looks at the first couple and their attempt to -- jody cantor looks at the first couple and their attempt to balance personal and professional life. >> jonathan gruber is an economist at mit who served as an adviser for both the massachusetts and national health care laws. he recently explained the salaries and differences between
the two. this is an hour. >> i really appreciate you being here at the town hall tonight. we have jonathan gruber here to speak, and award winning mit health economist and director of the program of the national bureau of economic research. he was a key architect -- i heard of him alive when he was -- a lot when he was working in massachusetts helping the massachusetts people put together their reform. he has also worked with the administration and congress when they developed the health care reform legislation that was passed about two years ago. he is also the co editor of the journal of public economics, associate editor of the journal of health economics. he has published more than 125 articles, has edited six research volumes, is author of public finance and public
policy, which is a leading undergraduate text. which is why he probably speaks with great authority about the law. he has written a book called "health care reform: what is, why it is necessary, and how it works." i think it is a very fast and very informative read. please give a warm town hall will come to jonathan gruber. [applause] >> thank you very much, and thanks, bob, for the kind introduction. i have about 10 minutes to start and there's a lot to talk about with healthcare reform. i will start with a little story. my lunch -- your sister lives -- younger sister lives here in seattle and this story involves her and she came -- the story
involves her coming into the house and said, dad, dad, i need help, where islam? -- where is mama? and my father said, i don't know where she is. where can i -- but can i help? she said, no. he said, what you need help with. she said math. my father has a ph.d. in finance. he said, why can't i help you with it and she said, i don't want to know that much about it. [laughter] in that spirit, i will try to tell you not more than what you want to know. i am eager to hear your questions. i want to start by setting a little bit of background, which is understanding the importance of where we are historically and in terms of the numbers. we have been trying to do, the mental health care reform for -- fundamental health care reform for about 100 years on an average of every 17 years. and we have always failed until 2010.
and as we have failed, the problems have gotten worse. the number of uninsured in america continue to grow. we now have 15 million -- 50 million individuals. and the cost of health care continues to grow. health-care spending continued more slowly last year, but more slowly still means increasing health care to about 18% of our gross domestic product. if nothing is done, by 2018, -- 2080, we will spend four out of every $10 on health care. that may be good for the doctors in the crowd, but not really for the rest of us. and that is not feasible. we have these twin crises. in my book i represent them as a twin headed alligator up we are trying to deal with, and yet we have been mvet -- unable to decide how to deal with them. the real breakthrough came with governor mitt romney in massachusetts in 2006 when he signed into law a massachusetts health care reform, which took a new reproached -- a new approach that has not been tried
before the i like to call incrementalism. -- incremental universalism. meaning, leave people alone if they like what they have, but help them if the system does not work. the universalists are from the left, meaning getting to universal coverage. this was not a bit up and start -- rep it up and start over approach. it was not a scorched earth approach. it was recognizing that we need to keep the things that people like, but that we can get to universal coverage. he set up a system that i like to say is a three-legged stool. the first leg was ending discrimination in insurance markets. to end discrimination we have a flawed system in america where people are just one bad gene away from bankruptcy. the second was to get away from mandate so that insurance companies could price fairly. and a third step was subsidies, so health insurance could be affordable for individuals under this mandate.
this system was put in place in 2006 in massachusetts and has been enormously successful. we have covered about two-thirds of the uninsured in the state and have lower the cost by about 50%. and this is the basis for the affordable care act. it passed in march 2010. the same basic structure as the affordable care act, but the affordable care act is more ambitious in two fundamental ways. the first is, and candidate mitt romney may not tell you this, but his bill was paid for by the federal government. we get reform in massachusetts and we did not have to raise taxes, as he will tell you. but what he will not tell you is that we did not have to raise taxes because the federal government paid for it. the federal government does not have that luxury. it is not like china is going to pay for our health care reform. we had to pay for health care
reform, so we had to raise revenues. if we have to raise revenues. but that is one place we had to be more ambitious. the second is the bill in massachusetts is not really the second head of my two-headed alligator. it was not about cost control. it was not about dealing with this probably more important problem in the long run, honestly, which is controlling health care costs. and i'm here to tell you that is okay. that is a lot harder problem. ultimately more important problem, but a lot harder problem, but a problem we are moving forward toward solving. we are not there yet the -- but the affordable care act moves forward in a number of ways to try to control health-care costs. it will not be the last word on cost control, but it will move us toward ultimately controlling health-care costs and not ending of spending 40% of our income on health care. -- 40% of our gdp on health care. buzzer the two steps in which the federal health care law was
a more ambitious. i hope we will go through those details and answering questions that you have tonight. that is an overview for now. i would love to talk with bob and hear his questions and hear your questions. thank you. [applause] >> thank you very much, jonathan. i think this is an interesting topic you brought up. obviously, a lot of us here care about our health care system, what looks like and feels like. you mentioned one thing in the beginning that has to do with incrementalism verses a broader sweep. could you speak a little more about why incremental this time, why not a broader sweep? how can we meet our goals if we do not -- ? >> the pattern is interesting. in every round of health care reform the approach has moved to the right. we have moved from a single pair to a somewhat less single payer to the clinton, which had
these regionally cooperative, but would still configure the health care system. this time around there are two fundamental problems that would -- with trying to completely reconfigure the health care system. the first is, most americans are happy with what they have. get their insurance from a large employer. they wish it was cheaper, but they have a variety of choices. there are employer picks up most of the cost and they are happy. in american politics you do not get far by ripping up what makes to under 50 million people happy to make -- 250 million people happy to make 50 million people happy. the second is that private industry is not going away. we have bailed out industries much smaller than that. we are not going to wipe a $300 billion insurance industry. we had to bring them along to make this feasible. it led to a realization by many of a single payer system that
was not happening in the in the near term, but that we could move to a system that is feasible and get us to the goal of universal health care, george. -- a universal health-care coverage. >> that is very good. on a lot of us care about that. one of the issues i you brought up that is really important -- you said it was a two-headed alligator. you mentioned you were working on the access issues, but really, there's also the cost control. in massachusetts, you did not bite on that bullet, but you did in the national. what has to be done to make that successful? >> health control is really hard. i think the book is that it was -- i like to think of it as like having to go over two hills. the first hill is scientific, which are frankly, there are a lot of good ideas out there. we do not know how to bend the so-called cost curve in a way that would not put u.s. health
at risk. if we just that we are not spending more than 18% of gdp on health care, that would do it, but that would not be the solution. a lot of what we spend on does improve health care. how you distinguish what does it and what does not? the second is the politics. this is a very hard problem to solve. anytime you pose something that can help control costs, it is easy for the opponents to attack it. our political system is not prepared to deal with this. my favorite example is -- many of you may remember in november of 2009, an independent set of doctors who recommend when your kid is immunized recommended that mammograms no longer be recommended for women in their forests -- in their 40's. this was an economically based decision, but based on -- this was not an economically this --
based decision, but based on the false positives we were given early. the political system went haywire. the government wants to take away your mammograms was the headline. this is not a government agency and they are not taking away anyone's mammograms. it is bad enough if you read the affordable care act, which i recommend that you do not, but in their it actually says that preventive screening is not -- now covered for free. every american with health insurance now has the right to get preventive done for free. they literally could not bite the bullet and they are agreeing with that because of the political blow back. it is a long winded way of saying, we have got a long way to go before we're going to get to fundamental cost control. what this bill does is take a spaghetti approach to cost control. it throws a bunch of stuff against the wall to see what sticks. there are a number of different
approaches, each of which is the best from experts. -- each of which represents the best thinking from experts. we're going to try them and see what works. >> how are we going to make sure we get there? >> there is a famous statement from a nobel prize-winning economist, herb stein, who said, if something must end, it will. eventually, we will not spend 100% of gdp on health care. i do not know how we are going to get there. i can tell you that it is unlikely we are going to get there in the way that england did, for example, where they said that no one over 75 gets transplants. that is not the american solution. i see it moving to an explosive two-tier health care system. -- explicit two-tier health care system. right now we have an implicit 2-tier health care system. healthre in the u.s. care system, educated, higher- income, and typically non- minority, our health care is as
good as the rest of the world, regardless as what people say. all the bad statistics are driven by the people who are out of the health-care system. and right now, it is implicit. we need to move to an explicit 2-tier health care system where everyone is guaranteed good, basic health care. we have to recognize that it is america and some people want to buy better health care, we need to let them in most european countries you can buy with your own dollars -- we need to let them. in most european countries you can buy with your own dollars better health care. >> you change topics quite a -- to change topics quite dead bit. -- quite a bit. you mentioned revenue, and how massachusetts was lucky. it had $350 million coming down the pike. the national bill does not have that. the national bill also raised a lot of revenue. and i think it is -- our deficit is decrease because of it. can you tell us about that? what actually does happen?
who gets taxed? who pays for it? >> president obama plaze -- laid out the number one principle in this bill, that there should not increase the deficit. to make this work, we had to spend about $1 trillion. we had to raise revenue to reduce spending. what the bill does is several things. first, it cuts private health insurance that injured the medicare population -- that insured the medicare population. but we were paying $1.17 for medicare insurance. we ended that. that raised about $250 billion. we raise about $300 billion by reducing reimbursement to hospitals that treat medicare patients. about half of it was costs and -- cuts in spending, but half of it was also increasing revenues. those come from two sources. one is the sectors that operate on this bill. -- one is from the sectors that benefit the most from this bill.
there's the pharmaceutical sector, the medical device sector, the insurance sector, they will all pay new excise tax. the second is the new tax on the wealthiest americans, an increase in the medicare payroll tax for families above $250,000. >> he mentioned the pharmaceutical industry, health insurance -- you mentioned the health insurance industry, the pharmaceutical industry, does this help them become better citizens? >> i think it does. this is an important issue to cover. the trade off with the political feasibility argument is that we had to bring private insurers along. i know that upsets a lot of people. the bill tries to keep them as good citizens in two important ways. the first is the so-called health insurance exchanges. right now, if you want to buy health insurance in the so- called non-employer market, it is a harsh and unfair market place where is hard to shop effectively. it is confusing, prices are high.
this sets up an exchange for all non-employer in jurors will come to one place that will be competitive -- insurers will come to one place that will be competitive and easy to shop. we have done it in massachusetts. it is a terrific shopping experience. i think it beats the pants off orbits. it is a terrific shopping experience. when people are shopping across well-defined products,that is when competition can work its best. there will be new competitive pressure on insurers. blue cross and charges more than other insurers because they are blue cross. that is because people know them. and when they are on the shelf, they will say, why am i paying more? those benefits are the same. the second is the medical law regulation, which regulates and limits the amount of money they can have in profits and overhead. >> a want to get to a couple of parts of the bill but i think
are important. one of them is the protections. many people do not trust the insurance companies and that is not just because of transparency, but how do we know that people do not have limits to keep them from getting pushed into bankruptcy or something else? can you talk about the protections that are there? >> it is a great question. i think this is the most important part of the bill, and the least appreciated. most people in this room will have insurance on they -- from their employers or the government. we have to recognize that with 50 million uninsured americans, and in many individuals better in the non-employer market, they are facing enormous risk to their financial security. we are in a system in america in most states, such as this one, where you can buy insurance and the minute you get sick, you can be dropped. or in some states they cannot do that, but they will say, up
to $1 million per month. it is totally illegal. we do not have real interest. -- we do not have real insurance for people who do not have employer insurance or government insurance. that is a fundamental failure of an economy as wealthy as ours. it is greece -- crazy to put that much uncertainty ahman the public -- is crazy to put that much uncertainty on the public. blogger will you be kicked off -- no longer will you be kicked off because you are sick and blogger will be charged -- and no longer will you be dropped if you're healthy. >> we have community-based intervention, which i think are really important. if you look at the health of the committee, it is often times -- community, it is often times driven much more by what we do in our community as opposed to political intervention. what does the bill do to make a difference in those areas? >> the bill is trying to make a difference in those areas. it puts a lot of money and resources into community health centers to try to improve those centers to meet the needs of
their communities. as i said, a lot of money for individual-based prevention. there is a lot of money for wellness and initiatives. what the bill tries to do is not just to ensure people, but to -- in sure people, but to built on the resources to improve people's health beyond medical care. >> i have spoken to a lot of conservative people who are very upset about people getting a entitlements or a gift given to them. the issue of personal responsibility rises with the population of the time. how does this bill address personal responsibility? >> it is fascinating, because what is more personal about personal responsibility than an individual mandate? the genesis was in a conservative think tank. when mitt romney signed the bill in 2006 from on the podium with him was a spokesman for the heritage foundation saying how wonderful the bill was.
because of the individual mandate. because that is about personal responsibility. it is about ending the free ride for individuals when they are sick and to jump back out when they are healthy. this bill is trying to thread the needle of using the individual responsibility, but not putting such a burden on people or for the affordable for -- it is unaffordable. for example, an individual mandate, but we offer low tax credit. and we have an affordability extension so no one has to pay -- exemption, so no one has to pay more than 8% of their income for insurance. if it costs more than 8%, you are no longer subject to the mandate. as you said to me in the greenroom, is as if you shot a bullet with are hitting -- without hitting somebody. we are trying to do this amazing bouncing ask that -- balancing act. >> you wrote a book that is a graphic novel. why?
>> it couple of reasons. the publisher approached me and said it would be a great way to learn about the health care bill. i was very eager for people to learn about the health care bill. you read the polls and you ask people what they think about the affordable care act and they -- about 45% would say they like it. you ask them what they think about ending discrimination in the insurance market and 70% like that. what you make about making it more affordable to get insurance. 70 percent time liked it. they just did not understand it. -- 70% like it. they just did not understand. i thought a comic book was a great way to learn. my son was a great reader of this novel -- a graphic novel format. he convinced me to do it. >> but you did not have batman. >> i did not. >> i read it and i really enjoyed it.
the next up, who is the audience for this book? who you think is more to read it? -- is really going to read it? what difference does it make? >> i have in mind the audience being anyone who has an open mind about this bill. i do not think is going to change anyone's mind if their mind is made up. but this is a really radical transformation of our system. it is complicated. and i think there's a lot of misinformation and disinformation about this bill. i think this is appealing to two groups. one is the cautiously skeptical too cautiously supportive, but just unsure. they want to read it and learn and decide for themselves. i also have a particular audience in mind, which is the people who are inclined to like universal coverage, to like what a democratic president does, but feel like this bill did not get there. it did not meet their needs.
they are just not satisfied. i am stunned with the number of self-described liberals who do not support the bill. i think a lot of that is the people not understanding what the bill does and what is in it. that is another audience i would like to reach with this book. >> i will do one more question, but i'd like -- would like to open this up to the general audience. we have to devote microphones, -- two microphones, one there and when there. -- one there. if people want to start asking questions, feel free to line up. i want to go back to your area of rationing. and i will not call it rationing, but that is what the opponents of this bill call it. they are comparing what we're doing, whether it works or not. and you mentioned the two- tiered system. how are we going to approach health care in the long run in this country? there are limits to what you are going to do.
as the different mechanisms are built in, are they going to take care of that? how are we going to make those hard decisions and how will we inform ourselves of the best way to do it? >> basically, if we think about the coverage problem and the cost problem, the coverage problem, we sort of knew what to do. it was a matter of crafting it in a way that it would get through tough politically. the cost problem is much harder. it's because we just do not know. we do not know what will work scientifically and what will pass politically. what does the bill do? let me talk a little bit about what the bill does. health care is the single largest and single fastest- growing sector of the economy and we have no idea what works. we do not know what works better than what? it is crazy, right? what do you do in that situation?
if you need to learn and research on what makes health care work. however, once you mention this bill, then that -- then people say, that means the government is going to ration my care. there is $1 billion to be prepared this institute to study what works and what does not. but the results of that are not allowed to be setting insurance decisions. that is crazy. but that was the political compromise. the bill has in its dozens of pilots of alternative ways of organizing care. we have the so-called fee-for- service medical system where doctors essentially get paid more than they do. -- get paid the more they do. there is a famous quote about having a doctor decide how much medicine you take is like having a butcher decide how much red meat. we assistant where doctors are paid based on how healthy you are, not -- we need a system where doctors are paid based on how healthy work, not on how
they treat you. but that is hard to do. anytime you're going to control health-care costs you will be cutting someone's income. that is hard to do. how do we get there in a way that will bring the relevant parties along? that is what the bill does. what the bill does is to set up dozens of pilots to get us to around two. -- round two. now we deal with the cost. >> here is the first question. >> i am definitely one of the liberals who does not understand the bill, so i am delighted about your graphic novel format. ipad out of pocket for my own hundred because i am so often -- i pay out of pocket for my own health insurance because i am a self-employed. i recently became pregnant and i got involved in the system even deeper. i was delighted with group health until i became pregnant. once there was a series of tests that became recommended, i became mired in the quagmire of as to make cost up front of
what -- estimate costs up front of what i would be paying out of pocket from -- toward the deductible. why is it legal for the health- care industry, for health care providers to not actually tell you up front exactly what you will be paying for a given service prior to getting the service? what ended up happening is that i pay double for what i was quoted initially. now i am fighting it. it is a quagmire. i would love your answer. >> that is a great question and this is a great example of the -- first, congratulations. it is a great example of the type of problem we will be solving with health care reform. i mentioned these exchanges. i urge you to go to health careconnector.org, not to make you jealous of massachusetts. but to see what is coming. we standardize benefits in a way that you go on, andwe show you exactly what you will pay under each plan. not just deductibles, but service cross.
-- service cost. what we need is an explicit description. you need to be able to go on to the website and say, i want these services, what will each insurer charge me for them? there is a great model for that. if you have got medicare part b coverage, on the medicare website, you can enter -- medicare part d coverage, you can go on the web site and enter the medicine you would be taking. they will tell you what you will be spending out of mind -- out of pocket each month. that will help consumers become more informed and shot more -- shop more effectively. more effective shopping will bring prices down >> how is it legal, though? the up-front costs are not stated overtly? >> i am not an expert on health care law. it would be illegal to state them incorrectly. >> well, they get around them by saying it is an estimate.
>> i do not know how to answer that. >> nobody knows. really, how much it is going to cost until they see the experience. i was on the public employees' plan. we had about 10 plans. i did not know how to compare one versus the other. until you have some way, is -- some way to compare apple to apple, you are stopped. -- stuck. >> professor gruber, i think the substance of this conversation is a trade -- is way more interesting than the politics. but i will wallow in the politics for a moment. as someone who was behind closed doors with mitt romney on this, i am very interested to understand if he was engaged ceo participating in these conversations in a thoughtful way? or did he do this kicking and screaming and over his life bo